Photo of worker pouring cement

Contractors across the U.S. have about completing prospective construction projects due to a nationwide concrete shortage. It鈥檚 a problem not new to the industry 鈥 companies have been fearing a growing project backlog , and the dwindling concrete supply could worsen the crisis.

Carroll鈥檚 Building Materials鈥 general manager Bill Yates told Florida鈥檚 Bay News 9 that he believes the price of concrete has increased by 35% this year, and that while there is plenty of construction work to go around, there鈥檚 simply not enough concrete to supply those projects. 

Though Yates鈥 company is based in Florida, concrete is undeniably vital everywhere. Concrete is the second-most used substance in the world after only water. It鈥檚 so integral, the concrete price hike can be seen first-hand in 葫芦影业APP鈥檚 Materials Price Tracker, a tool that shows the changes in material costs.

Graph illustrating the price of cement from January 2022 to October 2022.
Graph illustrating the price of cement from January 2022 to October 2022.

The average price of a cement bag in the United States, for example, has increased 3.27% since January. Though it dipped about 20 cents in early October, it鈥檚 on the rise again.

鈥淐oncrete is a huge part of our building industry,鈥 says Yates. 鈥淲e just need concrete. That鈥檚 it.鈥

Despite residential construction hardship, concrete-dependent infrastructure projects are plentiful

It鈥檚 no secret that the housing market is experiencing its fair share of difficulties 鈥 , making it increasingly difficult to buy a house.

But regardless of the residential construction sector鈥檚 condition, the need for concrete doesn鈥檛 go away. The commercial industry continues to boom late into 2022, and projects are popping up everywhere. It鈥檚 likely this trend will continue, caused in part by the federal government鈥檚 infrastructure bill from last year. The bill鈥檚 goal is to supposedly create two million jobs and a of new infrastructure projects.

Though an exciting addition to the construction industry, the new legislation poses questions for suppliers. With so many projects to complete, how can we ensure there will be enough materials to go around? Even before the infrastructure plan was set in place, contractors struggled with a steadily increasing . 

Bay News 9 reports that 鈥渄evelopers are building faster than suppliers can make the building materials,鈥 an idea that has contractors concerned.

Post-pandemic industry challenges, large corporations, and unexpected construction trends could play a part in the supply chain鈥檚 backup

It鈥檚 hard to pinpoint a singular cause for the current concrete shortage.

The United States鈥 construction industry has certainly been feeling the heat of global issues in recent years. Obstacles like the war in Ukraine have affected the supply of natural gas and oil, and the COVID-19 pandemic created blockages in transportation, labor, and more. 

ConstructConnect鈥檚 Chief Economist, Alex Carrick, that 鈥渢he pandemic certainly had an influence because heading into the pandemic the expectation, for example, was that housing would really deteriorate鈥nd then housing stayed much stronger than expected, so the price of lumber took off.鈥 

Learn more: Economists Weigh in on Material Prices, Construction Financial Outlook

Others might say that the efforts of large corporations are taking a tremendous toll on the supply chain, specifically concrete. New Amazon warehouses have recently been accused of allegedly 鈥渇orcing concrete suppliers to push scheduled pours out by weeks if not canceling them altogether.鈥 Amazon is throughout the country.

Contractors doing what they can to protect their businesses

The concrete industry itself is massive: Some of the nation鈥檚 top-earning firms have brought in billions of dollars this past year, according to Engineering News Report鈥檚 2021 specialty contractors ranking. For such a large industry, supply chain issues could be devastating.

There are, however, ways that contractors can deal with rising prices: financing material purchases, increasing margins, and utilizing an escalation clause to 鈥減rovide a more competitive estimate without additional margin for risk,鈥 according to 葫芦影业APP鈥檚 Dawn Killough. 

Keeping track of what financial experts have to say could be beneficial for contractors and business owners alike.

 鈥淚 can鈥檛 see how it isn鈥檛 going to be a world in which simply living and doing business isn鈥檛 going to be a whole lot more expensive than it was in the past,鈥 Alex Carrick said.

Despite the intimidating concrete shortage and price increase, it鈥檚 possible a slowdown may be on its way. Some building materials, like lumber, are finally experiencing steady prices after dealing with fluctuation for years. And though quite unpredictable, the future of the concrete supply chain will surely have an effect on the rest of the construction industry.