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Material shortages can raise construction costs and make delivery dates less reliable, but there is no universal shortage premium or standard number of days they add to a project. The effect depends on which materials are exposed, when they are needed, what alternatives are available, and how procurement and contract arrangements handle changes. Australian industry survey results show that businesses regard both material costs and shortages as significant delivery risks; they do not measure how much a particular project’s cost or schedule changed because of shortages.
How do material shortages affect construction projects?
A shortage affects a project through two related but distinct channels: availability and price. A material may be difficult to source on the required date, may cost more to procure, or both. The consequences depend on the material’s role in the work sequence and whether the project can adapt its sourcing or schedule.
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If an input is needed to begin or complete a planned work stage, a late delivery can disrupt the sequence of activities that depend on it. The project may need to resequence work, wait for the material, or assess an alternative. Each option has trade-offs: resequencing may not be practical, waiting can affect later activities, and an alternative may require review before it can be used. These are possible pathways, not a fixed outcome of every shortage.
On the cost side, constrained availability can expose a buyer to higher material prices or additional sourcing costs. But an observed increase in a material’s price does not, by itself, show that a shortage caused it. Prices can move for multiple reasons, and project costs also include labour and other inputs. A project-specific estimate needs to distinguish those factors rather than assigning every increase to material availability.
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What do the Australian industry figures show?
Infrastructure Australia’s 2025 Industry Confidence Survey found that 64% of surveyed organisations rated the cost of materials a major or significant project-delivery issue: 20% rated it major and 44% significant. 47% rated material shortages major or significant: 12% major and 35% significant. These are reported assessments of delivery issues in an Australian industry survey—not the share of projects delayed by shortages, nor a measured estimate of the cost increase caused by them. See the 2025 Infrastructure Market Capacity Report.
The distinction between cost and shortage matters. Respondents rated the cost of materials more often as a major or significant issue than material shortages. That pattern indicates that price exposure and availability concerns should be tracked separately; it does not establish why prices changed or how much of the reported cost concern came from shortages.
The same survey reported other pressures: 63% rated the cost of labour a major or significant issue, and 59% did so for labour and skills shortages. Infrastructure Australia’s report says, “Labour and material supply disruptions remain the leading causes of project disruption.” The survey context is a reminder that a delayed or over-budget project may face several constraints at once. It would be misleading to attribute every cost increase or schedule slip to materials alone.
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Material category also matters. In Infrastructure Australia’s 2024 survey, 14% of surveyed businesses rated steel or steel products a major supply-chain threat, as did 12% for timber or timber products. The same table reported 10% for concrete or cement and 8% for construction equipment. “Major” here means a rating of 9–10 on the survey’s severity scale; it is not a measure of how often a shortage occurred or how many projects were affected. These figures are from a 2024 Australian survey, not a current global ranking. The 2024 Infrastructure Market Capacity Report also treats risk allocation and timelines as project-delivery concerns.
Do shortages always increase costs or delay completion?
No. The official figures establish that surveyed businesses perceive material cost and availability as significant risks, but they do not establish a universal amount by which shortages raise project costs or a standard delay in days. A shortage can be a risk without producing a measurable effect on every project.
For an individual project, the impact depends on the specific input, market, location, procurement date, and required delivery window. A material that is not needed until later may leave time to respond; one required for a near-term work stage may offer less flexibility. A project may also have sourcing or sequencing options, while another may have fewer practical alternatives. The relevant question is not simply “Is there a shortage?” but “What is exposed, when does the project need it, and what happens if it is unavailable or costs more?”
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Price changes also need a careful comparison. Infrastructure Australia’s 2025 report says the Producer Price Index grew 3.4% over the 12 months to June 2025, while construction-sector wages rose 3.2% over the same period. The report describes this as reinforcing a post-COVID trend in which material prices rose more than wages. Those figures provide market context; they do not isolate shortages as the cause, and they are not a project-specific forecast or shortage premium. See the 2025 Market Capacity Report: Industry View.
How can you assess a project’s exposure?
Compare projects or sourcing plans using the same set of questions. This makes the basis of a risk assessment clearer without pretending that survey percentages can predict an individual project’s outcome.
- Identify the exposed materials and their project role. List the inputs that matter to the project and note when each is required in the work sequence. A shortage risk is more actionable when tied to a specific requirement and milestone than when described only in general terms.
- Separate availability risk from price risk. Record what is known about whether a supplier can provide the material when needed, and separately record the relevant price information. A perceived supply-chain threat is not confirmation of a particular lead time; verify delivery timing with the supplier for the project and date in question.
- Track other cost and schedule pressures. Keep material-price movement distinct from labour and other input costs. Likewise, document other constraints affecting progress. This helps prevent a material shortage from becoming a catch-all explanation for unrelated cost changes or delays.
- Make the geography and date explicit. State the market, location, and period behind any evidence. The 2024 material-category ratings are Australian survey responses from that year; they should not be represented as a current ranking for another country or project.
- Check the contract and schedule context. Review the project’s actual procurement responsibilities, change procedures, risk allocation, and delivery milestones. A shortage does not automatically change a contract price or completion date; the implications depend on the project’s terms and circumstances.
- Describe the uncertainty, not just the conclusion. If evidence supports a risk but not a quantified effect, say so. Use project- and date-specific information to estimate an impact; do not convert a general survey rating into a cost percentage or delay duration.
This framework is useful when comparing two materials, suppliers, sourcing plans, or projects because it separates exposure from outcome. Two projects can face the same category of supply concern but have different consequences because the material is needed at different stages, the delivery windows differ, or the available responses differ.
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What can project teams do when a material is at risk?
Start with the project’s actual need date and the evidence available for that material, rather than assuming that a broad industry concern predicts a specific delivery problem. Then make the risk visible in both the cost and schedule view of the project.
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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errors- Connect procurement to the work sequence. Identify the stage that depends on each at-risk material and the date by which it must be available. This clarifies whether a reported sourcing concern is relevant to near-term work or a later milestone.
- Ask for project-specific delivery information. Treat survey results as context, not supplier confirmation. Seek information tied to the material, quantity, location, and required delivery period, and record when that information was obtained because conditions can change.
- Keep cost assumptions traceable. Record the material price basis and date separately from labour and other cost assumptions. If a forecast changes, note what changed and what evidence supports the revision. This does not prove causation, but it makes the estimate easier to explain and update.
- Evaluate responses before relying on them. Consider whether the schedule can be resequenced or whether an alternative source or material can be considered. Do not assume an alternative is interchangeable: assess the project’s requirements and approvals before treating it as a solution.
- Review risk allocation and change procedures. Check the contract documents and project process before assuming who bears a price increase, what notice is required, or whether a milestone can change. The effect is project-specific, not automatic.
- Communicate the evidence and its limits. Explain what is confirmed, what remains uncertain, and which project activities could be affected. Avoid presenting a perceived risk as a confirmed shortage or a forecast as a measured delay.
These steps do not eliminate supply risk. They make it easier to distinguish a general market concern from a project exposure that needs a decision, and to explain why a cost or schedule forecast has changed.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What is the most reliable way to estimate the effect?
Use project-level evidence tied to the material and the relevant dates. The available Infrastructure Australia reports provide industry context, reported risk severity, and market-wide indicators; they do not calculate a shortage premium for a project or predict how many days a shortage will add.
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A defensible estimate should make its assumptions visible: which material is involved, what the project needs and when, what supplier or market information supports the assumed availability and price, and which other cost or schedule pressures are present. Where the evidence does not support a number, report the exposure qualitatively rather than presenting an unsupported percentage or duration.
That distinction is essential for useful reporting. “Material shortages are a significant concern for many surveyed Australian organisations” is supported by the 2025 survey. “This shortage will add a set amount to this project” requires separate project-specific evidence.
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Does a material shortage automatically count as force majeure?
Not automatically. Whether a shortage falls within a contract’s force-majeure or other relief provisions depends on the wording, governing law, and circumstances; a general market shortage does not establish entitlement by itself. Review the contract and obtain qualified legal advice for a specific project.
What records should I keep if a supplier cannot meet a delivery date?
Keep dated supplier correspondence and quotations, the requested and confirmed delivery dates, relevant purchase and change records, and the project schedule versions showing affected activities. A clear record helps distinguish what was known at each point from later assumptions, though it does not alone prove that the shortage caused a particular cost or delay.
Can a contractor pass a material price increase on to the client?
That depends on the contract’s pricing and change provisions, the applicable law, and the facts of the increase. Neither a survey finding nor a supplier’s revised quote changes the contract automatically; review the project documents before treating a cost as recoverable.
