Where’s the wood ?: A lack of materials is affecting the construction industry


Where’s the wood?
The construction industry is suffering from a shortage of materials

Construction is looking up – but there is one big problem. The pandemic is causing delivery bottlenecks and material is becoming scarce. One consequence: enormous cost increases for companies and building owners.

Shortages of materials, delivery problems, rapidly rising prices: the construction industry, which is actually booming, is currently very worried. Because steel, wood and insulation materials have become considerably more expensive and scarce this year due to delivery bottlenecks in the pandemic. The roofers who rely on wood have been hit particularly hard: The prices for battens for the construction of roof trusses have exploded since February, complains Dirk Bollwerk, President of the ZVHD roofing association and head of a medium-sized company in North Rhine-Westphalia, in an interview with Reuters. “And you have to be lucky to get anything at all.” In his craft guild there were increasing reports of construction stops. “The wood crisis caught us off guard in the roofing trade.”

The roofers are not alone with the problems: 39.4 percent of the construction companies stated in the May survey by the Ifo Institute that they have problems with material procurement. Politicians have recognized the explosive nature of the problem, which is also likely to become an issue in the approaching election campaign. Because the dream of their own four walls could burst for some. Builders must fear getting into trouble with ongoing projects because of the enormous cost increases. The additional material costs that have accrued since the beginning of the year can add up to a lot for the roof and the other trades in a single-family house. “That adds up to 15 to 20 percent across all positions. Wood sometimes costs twice to three times the price,” predicts Association President Bollwerk.

At a round table with the construction and wood industry, Federal Minister of Economics Peter Altmaier hinted at easing the situation, but does not want to know anything about export restrictions. Because these could trigger a boomerang effect if other countries were to isolate themselves as well: “That would not help anyone on the world market,” said a spokeswoman for Altmaier’s department. According to the roofers association, however, the latter sees a need for action to waive contractual penalties in the event of delivery-related construction delays. In addition, the increased use of so-called price escalation clauses is being discussed: “These lead to providers or suppliers being able to pass on or pass on higher prices more easily,” explains Bollwerk. The President of the Crafts Association ZDH, Hans Peter Wollseifer, sees public clients in a role model function: They should make the clauses the standard.

Pandemic shakes supply chains

The causes of the delivery problems are rooted in the corona pandemic: “With the recovery of the economies in the USA and China, the international supply chains were mixed up,” explains the construction association ZDB. The high international demand for wood, the pest infestation of forests in Europe and Canada as well as export restrictions led to rising prices and a shortage of wood in Germany too – especially since other countries paid significantly more for sawn timber. With a view to the shortage of materials, which also affects plastics, ZDB General Manager Felix Pakleppa recently warned: “The bottlenecks have the potential to bring the construction sites to a standstill in the summer.”

The problem is exacerbated by the fact that some sawmills in this country shut down in the Corona crisis in 2020. The remaining companies cannot cope with the surge in demand. Federal Managing Director Markus Jerger from the BVMW SME Association proposes to the Ministry of Agriculture to lift the logging restrictions for spruce wood in the current financial year. The reason for the limitation, however, is extreme forest damage caused by drought, storms and bark beetles. With a view to the lack of material on the construction sites, roofer president Bollwerk hopes that the situation will relax a little in the coming months. “But it can also be that there is only hope.”

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