Coronavirus Poised to Cause Materials Shortage
The construction industry has recently been a healthy market, but it still experienced challenges with costs and the search for talented laborers. But another obstacle may hit the jobsite that is being felt by the rest of the world: the coronavirus.
As reported by GlobeSt.com, which offers commercial real estate news, the coronavirus has made the certainty of construction cost projections rather murky. “The impact of the virus is impossible to predict with certainty, but any prolonged slowdown in Chinese or global economic and manufacturing activity is likely to have significant ramifications for construction costs,” according to the JLL 2020 Construction Outlook, as cited by GlobeSt.com.
The virus may also impact the availability of materials. Because roughly one-fourth to one-third of the construction products that builders use in the United States are sourced from China, a sustained slowdown in Chinese production can lead to material shortages in the United States and rises in material costs, JLL said.
But there may be a silver lining: Reduced construction activity due to virus containment efforts will result in a reduction in demand of materials, offsetting price pressure. However, “Without the ability to accurately forecast the impact of the virus, we have widened our materials price forecast to account for the uncertainty,” JLL added.