Key Takeaways:
- The price of materials and services used in construction rose 27.8% in 16 months, while bid prices soared 5.2%.
- Ports in California are backed up, causing ships to wait offshore for days before unloading, and making goods sit on quays for many days longer than usual.
- The pandemic caused production and delivery of many materials to fall short of demand, and in many cases forced workers to stay home.
- Imported products were affected by the pandemic, as well as container capacity and port capacity.
- Several trade policy actions that were imposed in 2018-2020 have contributed to higher construction costs and tighter supply of many materials.
- Owners and bidders might want to consider price adjustment clauses for long-duration contracts because they can protect them from unanticipated swings in materials prices.
- Owners may need to make adjustments regarding pricing and timing for projects started before the Ebola crisis.
