Supplies in Short Supply
While we are collectively excited about more sectors of the economy reopening and a return to "normal," it’s important to put things into perspective because we are experiencing hyperinflation in key building inputs like lumber
, and that should ring alarm bells for everyone.
Prices have been skyrocketing and as our friend, Ed Capodanno of the Associated Builders and Contractors of Delaware shared last week — and I am paraphrasing — “If you can even afford key inputs, you may not be able to secure important, needed materials due to supply shortages.”
Take basic, hot rolled steel for example. Tariffs and the absence of modern, domestic steel manufacturers have pushed prices into the stratosphere. Tariffs make sense as a tool in the political world to extract concessions here or there. However, you do that when you have idle capacity and the ability to avoid an economic hit because you ramp up domestic production to meet demand.
The pandemic has made us think about reshoring and modernizing the domestic production of necessary goods like health care supplies. We might want to add key building and construction inputs to that list too.