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Navigating the Global Material Price Surge

The world is going through a strange shift, and we believe that it's important to remain adaptive to the changing times, even if it can seem a little foreboding.

In this newsletter we’re taking a look at how the pandemic spiked a global phenomenon that's affecting the global supply chain and, as a result, the construction industry and prospecting project-owners.

On a positive note, we look at a possible solution to this chaos, by delving into a more alternative, local, and easy-to-come-by construction material that uses agricultural waste!

Read on to learn more and feel free to let us know your thoughts!

Regards,

Duncan
June 2021


Duncan Sinclair - 027 487 7766
duncan@blackpine.co.nz
In this Issue:
The Material Price Surge
- Demand vs Supply
- Cost Impact
- Conclusion
Agricultural Waste or New Home? 
General overview with a link to the article on our website
LBC Petal - Material


 
The Material Price Surge
We often like to think that as a species, we can work independently of mother nature and the bigger picture.  Current events are a reminder of how interconnected we all are; to each other and also to the world around us. 
 
A global phenomenon has been creeping up over the last year, and it's been directly affecting the construction industry, prospective home-owners, and those aspiring to post-lockdown renovations.
 
Recalling high school economics, it’s not that difficult to understand.  There is a direct relationship between demand and supply and this relationship strongly influences the price we’re prepared to pay.  The construction industry is not immune.
On the Demand side, longer term and more recent events have collided:
 
A national shortage of good quality housing, highlighted before the pandemic, has seen us struggle to respond. Bare-minimum building standards combined with an upfront-cost focused mindset have resulted in a legacy of low quality and unsuitable housing;  Although inappropriate for our climate and insufficient for our needs, the market’s efforts to relieve the pressure is driving our residential construction market.
 
Pent-up energy created by Covid enforced ‘lock-down’s, has expressed itself in many ways. Spending more time at home, playing and working, we’ve looked around and spotted many ways to improve our living conditions.  With overseas travel severely curtailed, money once tagged for holidaying has been repurposed to a kitchen or bathroom update, or perhaps an additional at-home office space.  The renovation industry has never been busier. 
 
New developments are completing the push to full industry capacity, with economic stimulus packages allowing bigger projects to get underway. 
Pine Timber

The Supply side has seen it’s own challenges:
 
Covid has provided us with an abject lesson in (post)-pandemic planning; Anticipating a downturn, we saw a substantial reduction in capacity, staff laid off, factories closed, and raw material supplies reduced. Many facilities are struggling to get up to full-capacity again.
 
Ironically high global prices for logs, mean that much of our ‘wall of wood’ timber stock is heading offshore, causing both increased prices and shortages of supply for us here in Aotearoa. 

Imported products have been delayed due to shipping issues, both on and off the water. Locally a backlog of capacity to load and unload ships is contributing to delays. 
 
Evergiven angle-parking in the Suez Canal was one prominent event that didn’t help supply times either!

Cost Impact

This ‘perfect storm’ of increased demand and disrupted supply is having the result you would expect:  delays to projects and increased prices. 
 
Industry suppliers are suggesting that quotes for construction supplies are unlikely to be valid for longer than 7 days.  ‘Price increase’ emails are becoming a weekly feature.
 
Although we sit in a pleasantly isolated corner of the world, we are not immune from global construction issues.  Feedback from UK and American markets indicates this situation is not exclusive to New Zealand.
Below is a table listing the projected price increases of products of many construction material companies in New Zealand. However, these numbers are likely to change.
Material Price List
Conclusion

Given the increasing cost of construction and the longevity of the result, it is even more important that we prioritise building ‘smart’.
 
Let’s take a holistic approach and work together to ensure that what we do build, is designed and constructed to provide a healthy environment.  It’s likely to last 50-100 years, that’s a lot of human and planetary health impact.

To hold ourselves accountable and inspire you, we include our office's monthly carbon reading with every newsletter! 

The month of May is
0.026 tCO2e
LBC Petal - Material


Agricultural Waste or New Home?
Straw Bale Construction
With all this talk about product price increases, shipping back-logs and heaps and heaps of delays, it may be more fitting to discuss a product that we can get locally - that doesn’t fall into the wormhole of supply chains. Straw bales.

Read more below to learn about the many benefits of this carbon-smart and regenerative construction material, consisting of 100% agricultural waste!



The Living Building Challenge format takes the form of a flower with seven Petals organising a project into performance areas. In our newsletters, the various topics of discussion are identified with the relevant Petal, helping to place it in context.

Signatures
From Tara, Duncan, Akshaya and Emma
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Black Pine Architects · PO Box 7204 · Whanganui, 4541 · New Zealand

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