Commercial construction recovery in the US could stall in the coming year as contractors struggle with steel supply and pricing, among other issues, the US Chamber of Commerce said Dec. 16.
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In a survey conducted by the Chamber, about 95% contractors said they are experiencing at least one product shortage in the fourth quarter, with steel representing the most-reported product shortage by 27% of respondents, according to a statement.
By comparison, 93% of contractors reported disruptive product shortages in the third quarter and 71% reported such issues in Q4 of last year.
Contractors participating in the survey said they were also faced with increasing challenges pertaining to the cost of project materials, especially steel.
"97% of contractors indicated cost fluctuations have a moderate-to-high impact on their business, up 23 points year over year" the Chamber said. "Of those who said material cost fluctuations have had an impact on their business, 43% said steel was their top concern."
The Platts TSI US hot-rolled coil index was assessed at $1,640/st EXW Indiana Dec. 15, compared with $1,009/st at the beginning of the year. The assessment reached a record $1,960.25/st Sept. 24.
Nearly half of the contractors pegged the steel supply and pricing problems on the US' Section 232 steel and aluminum tariffs. About 47% of respondents said the tariffs will have a high to very-high degree of impact on their business over the next three years.
The US is set to replace the tariffs on the EU with a tariff-rate quota system in January. Additionally, the government is now in talks with the UK, Japan and South Korea to negotiate similar adjustments to the tariffs.
Through the survey, contractors highlighted additional challenges for their business including labor shortages, roofing material availability, lumber supply and other construction material-related tariffs.
The Chamber's survey is conducted as part of its quarterly commercial construction index, which provides a data-driven outlook for the industry. The index also examines contractor revenue, new business confidence and project backlog.