The arrival of the COVID-19 pandemic forced countless companies in New Jersey to adopt new business models to keep their operations floating. Also, limited or paused activities in leading manufacturing hubs worldwide led to a massive supply chain mess across many industries. Moreover, the bottlenecks in major ports have caused delays in procuring goods amid high market demands.
These shortages in essential products and raw materials are one of the main reasons for inflation in the past year. The country’s inflation rate trended at 5% or higher last year, peaking at 7% in December 2021.
One of the most affected sectors in the supply chain turmoil is the construction industry. Numerous contractors have difficulty getting hold of the materials they need for specific projects because of empty shelves or high prices. For homeowner’s associations (HOAs)in the state, this has resulted in outdated reserve funds information allotted for upcoming projects within their jurisdiction.
The global health crisis might not affect the lifespan of the common areas in the community, but it has significant effects on the market prices of goods and services. The HOAs’ reserved money from the previous New Jersey reserve study might not cover the expenses needed at present. They might need to scramble for other funding sources because of the obsolete information.
Additionally, the scarcity of supplies will drag out the project, especially if the needed materials take a long time to be procured. Almost 30% of raw materials supply in the country are imported from China, one of the most affected by the pandemic. Because of the shortage, HOAs might need to postpone ongoing or upcoming projects in their neighborhood, which might disturb other projects lined up for the community.
To learn more about how inflation and supply chain issues affect a reserve study and how a NJ structural engineer can help, check this infographic from Lockatong Engineering.
