Skip to Content Old republic surety logo Old republic surety logo
  • About
    • Careers
      • Career Opportunities
      • Great Benefits
      • Culture
    • Our History
    • Our Underwriting Philosophy
    • Branch Locations
    • Executive Team
    • Field Leadership
    • Corporate Governance
    • Corporate Parent Company
      • Why Old Republic?
      • Financial Ratings
      • Old Republic Group of Companies
    • Get Appointed With Old Republic Surety Company
    • Contact Information
  • Contract Bonds
    • Why Old Republic Surety for Contract Bonds
    • Bid Bonds
    • FastBond
    • Maintenance Bonds
    • Payment Bonds
    • Performance Bonds
    • SBA Bond Program
    • Bonds for Growing Contractors
    • FAQ: Contract Bonds
    • Punch List for Contract Bonds
    • Resources
      • Contract Bond Terminology
      • Contract Videos
  • Commercial Surety & Fidelity
    • Types of Commercial Bonds
      • Court Bonds
      • Federal Bonds
      • Fidelity Bonds
      • License & Permit Bonds
      • Miscellaneous Bonds
      • Public Official Bonds
    • Fidelity
      • Business Services Bonds
      • ERISA Bonds
    • Credit-based Performance Bonds
    • BONDSTAR
    • FAQ: Surety Bonds
    • FAQ: BONDSTAR
    • Direct Bill
    • Commercial Resources
  • Claims
    • Commercial Surety Claims
      • Arizona Contractors License Bond Claims
      • California Contractors License Bond Claims
      • Oregon Construction Contractors Bond Claims
      • Property Brokers Surety Bond Claims
      • Washington Contractors Surety Bond Claims
    • Contract Surety Claims
    • Fidelity Claims
  • Blog
  • Contact
ORSC Blog
    • Contract Bonds
    • Surety Bonds
    • Commercial Bonds
    • Fidelity Bonds
    • Bonding Capacity and Bondability
    • Old Republic Surety Employees
    • Underwriting
    • Subcontractors
    • WIP Reports
    • Case Study
    • Bond Claims
    • Corporate Crime and Fraud
    • General Contractors
    • Jobs in Surety
    • Fastbonds
November 23, 2021

Planning, the Pandemic and Price Increases

Rich Sghiatti Rich Sghiatti
  • Contract Bonds

Construction guy with ipadIn November 2020, I had an opportunity to reflect on what 2021 might look like for the construction industry. You can read my prognostications in Construction Executive magazine and see whether my observations about supply and labor shortages, price increases and market demand have held up.

It’s been a topsy-turvy period for contractors, but one thing I stressed in November 2020 hasn’t changed: Project managers need to have a backup plan. That’s a given, regardless of the times, but it’s been especially critical during the pandemic, when uncertainty has been the operative word.

Smart managers must assume there will be disruptions and build that into their planning. You have a much better chance of delivering your project on time and within budget if you anticipate delays and shortages. Materials that you might normally expect to receive in a few weeks are now taking up to six months to get, and prices have gone up tremendously for certain items.

Contractors can stay on top of the supply chain if they plan effectively. Firms that utilize critical-path scheduling and take advantage of the latest project management software are probably going to do fine. But if you’ve put off modernizing your planning, estimating and takeoff capabilities, now is the time to invest in a system that can help you stay on top of a very dynamic market.

Price hikes and labor shortages

Due to a combination of COVID-related cutbacks, natural disasters that shut down production for some key building components, and the recent surge in residential construction, material costs have gone through the proverbial roof.

Lumber prices grabbed the headlines, peaking at an all-time high of $1,670.50 per thousand board feet in May. In June, though, lumber prices tumbled 40%, and by mid-July, they were down to $521.40. Luckily, commercial contractors aren’t as dependent on lumber as residential builders, but other essential materials such as steel, copper, brass, laminate sheeting and PVC pipe have seen significant price increases as well.

Hopefully, prices will settle down a bit later this year and into 2022, but don’t expect costs to return to what they were prior to the pandemic. In addition, windows, doors and appliances have been hard to come by. Contractors can get these materials, but they may have to wait months to receive them.

A skilled labor shortage also has the potential to delay projects and increase costs. The Associated General Contractors of America’s 2021 Construction Hiring and Business Outlook Report say that shortage is expected to continue through 2022, as confirmed by research firm Deloitte’s report, 2022 Engineering and Construction Industry Outlook.

Don’t fail to plan

The old adage, “If you fail to plan, you are planning to fail,” definitely rings true today. It’s more important than ever that you sharpen your pencil on estimates and bids, include contingencies in your contracts (if you can) and pay careful attention to scheduling.

A few reminders:

  1. Don’t rely on just one supplier; get quotes from several sources.
  2. Pre-order hard-to-find materials.
  3. Lock in prices for as long as you can.
  4. Confirm prices just before you bid.
  5. Build contingencies into your contracts.
  6. Stay on top of your labor needs.

As projects ramp up, don’t get left behind because you aren’t prepared for the ups and downs of this market. Plan well so you can weather short-term fluctuations, remain profitable and position yourself for steady growth well into the future.

If you have any questions about anything regarding surety, reach out to the Old Republic Surety branch nearest you.

Related Links:

  • Contractor Materials Shortages and Materials Price Inflation

Topics Covered

  • Contract Bonds
Rich Sghiatti
Rich Sghiatti

Rich Sghiatti is Regional Vice President of Contract Surety Operations of Old Republic Surety Company in Louisiana, Mississippi, Alabama, Tennessee, Georgia, Florida, North Carolina, South Carolina, and Virginia.

Recent Posts

Commercial Bonds 3 min read
Behind the Scenes: Understanding the Claims Process
x Rudy Dominguez August 01, 2025
Old Republic Surety Employees 3 min read
One Year in Surety: What I Expected, What Surprised Me and Why I’m Glad I Made the Jump
x Spencer Shaw July 25, 2025
Old republic surety logo
  • Careers
  • Blog
  • Pay Online
  • Agency Login
18500 W Corporate Drive, Suite 170, Brookfield, WI 53045
800.217.1792
©2025 Old Republic Surety Company All rights reserved.
  • Privacy Policy
Old Republic Insurance Group logo