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Soaring inflation, supply chain issues become project ‘speed bumps’ statewide

MORGANTOWN, W.Va. — Enormous amounts of government relief money directed to public and private projects has created a labor shortage for contractors. Additionally, soaring material prices have created very tough times for owners, suppliers and contractors.

Mike Clowser

West Virginia Association of Contractors President Mike Clowser said a recent survey shows the industry is booming and there really no end in sight for the near future.

“Most all of our members are looking for people and looking for qualified people,” Clowser said. “We think this is going to be an exciting time for construction i the next five to seven years in West Virginia.”

Since April of 2020, inflation has pushed the cost of construction materials to historic high levels in historically short periods of time. According to Clowser, steel prices have more than doubled, lumber prices have increased 61% and copper or brass components are up more than 60% over that period.

“We’ve had spike increases in steel over time and we’ve had diesel fuel spikes over the years, but we have never seen something like this sustained at the level it is,” Clowser said.

Rapid increases have required changes to contract terms, in some cases after the bidding process and before work has started. Additionally, supply chain problems have caused completion delays for everything from striping highways, home plumbing projects and multi-million dollar utility infrastructure projects.

“We have had to not only raise the cost on every project that has gone out to bid, we’ve also had to extend the timeframe to get material,” Clowser said.

He said prices are not only influenced by supply and demand. Some businesses are forced to increase prices in other operations to remain viable.

“If you bid a project two years ago and you’re still in the project and all of a sudden prices went up 100% an owner may hold the construction company to the contract prices,” Clowser said. “We’ve had a number of contractors that have had to weather this storm.”

Clowser said the situation eased slightly when the governor approved supplemental funding for public agencies to continue projects as planned. Meanwhile, many other projects are being scaled down or even delayed.

“That has allowed public owners to get additional funding to complete the project as planned,” Clowser said. “Certainly other agencies are looking at that and will have to look at that.”

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