Bottlenecks in supply chains and labor shortages in the manufacturing, construction and transportation sectors are expected to continue in the coming year, affecting the delivery of key goods and the supply of new homes.
Industry experts warn that global bottlenecks in key manufacturing and transportation networks will limit the supply of essential goods here for months.
Material shortages affecting food packaging production are expected to continue after Christmas, meaning Irish food producers are facing long times before their products are ready for the New Year.
Problems in sawmills and paper mills in Europe and delays in the supply and distribution of metals and plastics are blamed on the shortage of packaging materials, but these problems also have consequences for the delivery of new homes.
The Society of Chartered Surveyors of Ireland (SCSI) said bottlenecks and labor shortages are making it increasingly difficult to calculate the cost of building a home or extension, with prices of some materials changing almost on a weekly basis due to pent-up demand and a lack of supply.
Shortages of timber, metal, and plastic contribute to supply constraints for windows, doors, roof joists, steel trusses, and other materials used in home construction, driving up prices dramatically.
The head of SCSI’s Quantity Surveyor Group, Kevin Brady, said Brexit, the COVID-19 standstill, the blockage of the Suez Canal and labor shortages have led to a “perfect storm” that will delay delivery and increase the cost of construction projects.
A labor shortage has also been felt acutely in the food processing sector, with many migrant workers returning home during the pandemic.
Food Drink Ireland director Paul Kelly said factories are struggling to get the staff they need to operate at full capacity. Meat processing plants and other factories are affected as much of the work cannot be automated.
“Where there are skilled jobs and specialized roles, there is a lack of visibility. There is huge demand and wage inflation, but the overall operational level makes up the most in numbers – and many companies are facing severe pressure.”
He said extra work and automation are used where possible, but that only helped with some of the pressure.
Mr Kelly called on the government to address the delay in visa processing other than the United States Workers to fill roles to address shortages.
Mr. Kelly added that transportation, packaging, employment and rising food prices are expected to limit the availability of more “specialized” consumer bands in the future.
Figures for last month from the Food and Agriculture Organization of the United Nations appear Food commodity prices have increased by nearly a third year on year. These include staples such as meat, grains, vegetable oils, and sugar.
“In the end, this will lead to food price inflation,” Mr. Kelly said. “We may see slight restrictions in product ranges, but I don’t think this will be particularly visible to the consumer, because the shelves will still be full. What you may find is that some of the more specialized parts of the product suite may not necessarily be there, and producers may choose to stick with them Large volume products in the product group.
The bottlenecks that create problems for builders are also expected to continue in the coming year.
SCSI’s Kevin Brady said structural steel costs have increased 30 percent in the past year, and 50 percent since 2019. “Huge supply problems” with timber mean the cost of roof joists and floors has risen 30 percent in 12 months. Solid insulation used in floors or cavity walls is about 50 pieces more expensive, and quilt insulation, commonly seen in attics, now costs 20-30 more than a year ago.
The price of the reinforcing mesh, used in the foundations, has doubled since 2019, from around €40 to €50 per slab to around €100. Plywood, often seen in kitchens, is up about a third, and the price of metal studs used in partition walls has risen 25% in the past year.
In the past, suppliers could have held prices for three or four months. So if you get a price for the steel bundle, it will remain the same. Now, that period has shrunk to a month, or even weeks in some cases,” said Mr. Brady. “It’s hard for builders and surveyors to predict prices with these factors. There are industry experts who can predict costs, but some of these increases are abnormal, and the accelerated rate of change makes it difficult to do the job.
“People have savings from the pandemic and they want to build extensions, so there’s a huge demand for plumbers, carpenters, carpenters, construction workers and just about every trade, but there’s a shortage of people coming in.”
It’s inevitable that this will delay the delivery of new homes needed to tackle the housing crisis, said Pat Davitt, CEO of the Institute for Professional Auctions and Educators.
“In the end, it will affect the inventory, because the construction will not be finished if there are delays in certain areas. “It’s a builders’ nightmare,” he said.
Meanwhile, a shortage of between 3,000 and 5,000 truck drivers has led the head of the Irish Road Transport Association, Eugene Drenan, to warn people to consider preparing for Christmas now to avoid disappointment or being left without home heating oil when winter closes.
Doesn’t see Ireland suffer from a shortage of tanker drivers that has caused major problems in the UK, But he said there are other challenges.
“This year, it missed the end of the barley harvest, in terms of bringing barley forward – because there weren’t enough drivers to get it fast enough,” he said. “If you want anything for Christmas, especially for young children, get it more often. Don’t overdo it. And if you want heating oil, get an order within the next few weeks.”
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