Supply Shortages: Supplier Q & A

With reports from MBA Members about facing supply shortages due to delays caused by the COVID-19 pandemic, we chatted with a local supplier and MBA Member Services Director, Ashlee Berry, about the situation.

What kind of supply shortages is the industry facing? Specifically, what types of materials?

S. Primarily pine framing, and LVL.

AB. Master Builders Australia’s recent national survey showed that the materials in the shortest supply are timber, timber engineered products, roof tiles, steel and windows.

What does the timeline look like for material shortages? Should builders be getting in early?

S. It’s hard to put a time on it, some orders are out for 12 weeks, but we’re subject to delays from the timber mills so it’s hard for us to give definitive timelines, but allowing more time will help. We’re recommending that members be thinking ahead of schedule by 8-10 weeks as opposed to the usual 1-2 weeks.

AB. The reality is that delays and in some cases, cost increases, may be unavoidable and will need to be factored into your building pipeline. The national survey also showed that 70% of respondents reported an increased delay for availability of tradespeople, so we also recommend that Members plan ahead in relation to subcontractors as well.

What’s the forecast for a return to normality?

S. Not until the end of the year.

What are some current concerns you have around this, i.e. is this another toilet paper situation?

S. The customers that are coming in genuinely need the materials for immediate projects, we’re not seeing any panic buying.

AB. There are a number of factors that are contributing to this shortage, the extent of the delays and cost increases varies depending on the contactor, their suppliers and their location, but it is a very real problem across the industry. Factors causing these issues include:

• The sudden surge in demand created by the HomeBuilder grant, relaxed mortgage lending criteria and the government’s early access to superannuation scheme, with record low interest rates, and
• Imported materials still being delayed by COVID supply chain disruptions.

What can our members, who are facing difficulties acquiring materials, do to continue their businesses?

S. It’s hard to answer because everyday the situation is changing. But really the best thing is again planning ahead and organising materials 8-12 weeks ahead of time.

AB. Where contracts have already been signed, we urge our members to speak with your clients to discuss the potential delays that may be experienced. In some instances, contracts may need to be varied or extended. Where contracts are yet to be signed, we recommend that you take into account trade and material shortages, as well as the potential for increased costs, before you do so.

If you need assistance or advice in how to extend your contract due to trade or material shortage or delays, please contact the Member Services Team on (02) 6175 5900.