How rising material costs could impact city construction projects in Sioux Falls

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SIOUX FALLS, S.D. (KELO) — Construction season is well underway all over Sioux Falls, but from houses to city streets, the increased cost of materials is impacting the total price tag of projects. 

“It started going up last fall, really started going up this spring. PVC pipe is up 100 percent from the beginning of the year. so, it’s two-fold,” Winsupply owner Steve Holmes said.

Along with a big hike in price, Holmes says getting enough PVC to keep up with projects is an ongoing issue.

“The availability is getting worse as the days go by,” Holmes said. “It was OK at the beginning of the year, now more and more people are getting started with their projects. We’re on allocations and it’s getting harder and harder to get material, probably going to get worse before it gets better unfortunately.”

“So far we’ve been able to get the materials, we’re just seeing a cost escalation there,” Sioux Falls Principal Engineer Joshua Peterson said. “It’s been one of the most challenging years as far as materials availability.”

Peterson says contractors on some of the city’s largest utility projects have had to get creative to find supplies. 

“One of our contractors went to get some PVC from the east coast because they had found a supplier that could keep the price closer to the prices they had bid,” Peterson said. 

Still, it’s becoming almost impossible for contractors to maintain the prices they bid for these summer projects.

“We got a lot of the projects that are under construction now bid out in that January February time and the price differences from then to now is in just a couple of months is just kind of shocking,” Peterson said.

The city is working with contractors on how to cover the rising cost of materials.

“Whether we can delay a project to wait until there’s more availability and the price comes down,” Peterson said. 

Pandemic supply chain issues, a shortage of resin and the extensive winter storm damage in Texas are being blamed on the lack availability and rise in cost of PVC.

The challenge now is forecasting just how long these material issues might last as the city plans more major projects down the road.

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