Material Price Increase, Labor Shortages, and Construction Industry Trends with Insights from Stronghold Engineering Inc.

As the global economy slowly recovers from the impacts of the COVID-19 pandemic, industries far and wide – including construction – are facing a slew of problems, particularly with labor and material shortages and higher prices. Stronghold Engineering, Inc. explores these trends in depth and provides a blueprint for overcoming pandemic-driven fluctuations that could potentially affect your business.

Three factors driving a resurgence in economic growth today in the wake of the pandemic are backlogs, high revenue expectations, and contractor confidence. This resurgence, however, has been accompanied by widespread shortages of people and materials.

According to one report, over 70% of contractors face at least one type of material shortage, with shortages of lumber (over 30%), steel and electrical supplies (over 10%), and lighting supplies (10%) the most commonly cited shortages for construction across the board.

There have been modest price increases for other mission-critical resources such as fuel, copper, and aluminum, but more than anything else, lumber price increases have been significant, forcing home builders and remodelers to charge downstream clients with higher and higher prices.

These trends imply that we will continue to see longer and longer lead times and builders struggle to get their hands on the materials they need, and price increases for common construction materials are expected to continue throughout 2021.

A quick summary of construction industry survey results is as below:

  • Over 80% of respondents are experiencing product delays.
  • Over 70% struggle to meet schedules.
  • Almost 60% are bidding higher on projects.
  • Over 50% state that shutdowns and delays are a real concern.
  • Over 40% say material shortages are a consequence of COVID-19.
  • Almost 40% are forced to turn down work opportunities.

Labor Shortages

An important cost category for construction projects is the cost of labor. Many construction businesses are struggling to find skilled and qualified workers to fill open positions on their job sites. This, however, is not solely the result of the pandemic. Construction labor shortages have been around for a decade or more, but the pandemic simply put a tighter squeeze on an already inadequate workforce.

One survey found that over 80% of construction firms are having a hard time filling construction positions, and almost three-fourths of respondents expect labor shortages to affect construction over the coming year.

The combined effect of these trends is that we will see project delays and higher costs over the months to come. Many companies will be unable to take on new projects and the resultant drop in available supply (whether in the form of new housing, new installations in other settings, or completed projects that affect other industries) will continue to place upward pressure on prices.


So, what can you do to overcome these issues?

One way is to leverage technology to overcome the impacts of shortages, particularly labor shortages. This means making the most of the resources, materials, and workers you have today.

Consider the following:

  • Drone technology can reduce survey times (and costs) by a factor of five or more.
  • By investing in communications technologies, workers can spend less time waiting for survey updates or data on material quantities.
  • Downtime and waste can be eliminated with better monitoring of equipment, inventories, and processes.
  • Investing in worker safety can reduce lost work hours due to illness or injury.
  • By investing in better technologies and processes, you will be more likely to attract a younger worker demographic and will be able to harness the potential and efficiency savings of technology to lower costs and delivery times while others in the industry continue to struggle.

Other Trends

To future-proof ourselves against potential disruptions and risks, it is prudent to look at the changing construction landscape and to take proactive steps toward eliminating, reducing, or bypassing risks that can affect business efficacy in the years to come.

Some of the highest ROI strategies that construction companies today can adopt to drive better results tomorrow are as follows.

Improved Worker Safety and Sustainability

Safety is always a primary concern for construction workers, but COVID-19 brought it to the top of the mission-critical list. Better cleaning protocols, staggered scheduling, better safety equipment, and smaller teams are four ways safety can be improved in workplaces in the future. Sustainability is also a growing trend, one which has become even more important given the fragile makeup of many construction processes.

Investments in safety and sustainability can reduce long-term repair, maintenance, and servicing costs while lower operational costs and the carbon footprint of construction projects.

Remote Technology

We talked about drone surveys above. Remote monitoring – whether by drones or by IoT devices – can help improve the speed, accuracy, and timeliness of important construction data. Sensors and devices that measure, for example, machine wear and tear or fuel levels can help prevent breakdowns and downtime, saving considerable amounts of money in the process.

Minimizing Work Disruptions

Access to capital, labor, and materials are important drivers of construction project success. Payment disputes, contract issues, and supply chain bottlenecks can also have devastating results on project costs and timeliness. Better planning and resource allocation at all levels of the business can help improve decision-making and minimize the impacts of disruptions at different stages of construction.

Organizational Reorganization

Many construction firms use outdated business models that do not have the flexibility to drive true innovation that can lead to sustained growth. Organizational redesigns can help introduce some flexibility and build on cross-departmental synergies to do more with less. For example, formally establishing a change management and innovation department that can provide opportunities for innovation, availing tax incentives (as is common with green solutions), and improving cost-saving tech solutions to inefficient, outdated tools can lead to double-digit percentage improvements in output with concomitant reductions in cost.

Final Thoughts

We cannot predict the future, but we can make educated guesses based on past trends and events to better inform today’s decisions. While today’s supply chains are built for efficiency, not resiliency, and while issues such as labor shortages are years in the making, we can all make smarter investment decisions to make the most of what we have today and to lower our dependence on single-source inputs that can lead to business disruptions.

At Stronghold Engineering, we provide full-service design and construction support services, including engineering-procurement-construction (EPC), vertical, civil, and high-voltage electrical construction services, as well as design-build and modernization. We look to the future and focus on quality, teamwork, safety, integrity, and commitment to deliver world-class engineering and construction projects.

Learn more about how we are navigating today’s construction challenges and are implementing best practices that will last long into the future by visiting us at

Angelee Editor

Highly skilled professional with experience within the healthcare industry in network management, facility contracting and quality operations