Material shortages – a topic that has been widely discussed in recent weeks and months. At the latest since the incident involving the cargo ship Ever Given, which blocked the Suez Canal, many people have become aware of the problem.
This also led to delays in deliveries to Germany. But this is only a small part of the problem. There is currently a shortage of materials unlike anything seen in decades. The current coronavirus pandemic is also causing delays in production and disrupting supply chains.
The construction industry is boosting the economy, especially in such difficult times. Demand is high, but materials are in short supply. Wood, steel, and plastics are becoming particularly scarce. The reasons for this are, on the one hand, the dry summers of recent years, which brought the production of construction timber to a standstill. On the other hand, demand in China is booming, so that raw material suppliers initially supplied Asia, leaving Europe short of raw materials.
This has some striking consequences. Delivery bottlenecks are becoming increasingly common, as materials have been ordered but are simply not available in sufficient quantities. As a result, construction projects are being delayed or even halted. Some projects cannot even be started due to this shortage. Furthermore, this also means less housing construction, which is urgently needed in Germany and in the Cologne, Bonn, and Leverkusen region.
Due to the enormous competition and high demand for materials, prices are rising rapidly, with wood costs, for example, increasing 300-fold. The rise in material prices is currently leading to a "recalculation" in the commercial real estate sector. Some new construction projects have to be recalculated, and landlords are well advised to agree on adjustments for such cost increases in rental agreements before the lease begins. At present, it is not uncommon for economic calculations to go off track between the conclusion of the contract and the start of the lease during the construction phase.
In summary, wood, steel, and plastic are particularly affected by shortages. High demand is leading to supply bottlenecks, delays, standstills, and ever-rising costs. The forecast is that this will continue for at least another six months, if not longer. In these difficult times, there is nothing left to do but learn to deal with it, plan even better in advance, and adjust calculations on the landlord side at an early stage.
