Where Have My Supplies Gone?
Remember the crazy toilet paper and Clorox shortage of 2020? Having to create your own sanitizer at home, and only if you could find the right ingredients? Deciding between cloth or paper masks, this is, if you could find them on the shelves? While these days look a little different, the construction industry has seen supply shortages across the board. Current shortages include not only building materials, but also the ability to transport the few materials still in play. Then, if you are lucky enough to find the materials necessary to complete your project, finding the right skilled labor is just the latest major obstacle.
You may be thinking this “shortage of skilled labor” refers only to those who physically build the project. However, skilled labor shortages extend to those working in manufacturing plants, warehouses, production centers, and sales centers. There are times when manufacturing plants shut down due to illness outbreaks and increased safety protocols. When manufacturing shuts down, supply warehouses and production shut down. When supply warehouses shut down, transporting construction supplies and products becomes limited. Then, the completion of the project comes to a halt. Or, the design and construction team begin to search for alternatives.
Let’s dig a little deeper. The increased costs and shortages of building materials include but are not limited to lumber and plywood, structural steel, electrical supplies, windows, appliances, and paint. As you can probably guess, such shortages greatly impact construction timelines. Delayed construction timelines impact overall costs, which delay the start of return on investments. Such delays may also affect insurance, and no doubt, the ability to secure adequate extended funding for the project. For example, a major project design was completed at the end of 2019 and was ready for construction pricing. When COVID-19 outbreaks shut the country down, the project Owner saw significant increases in cost due to material shortages. Despite the significant investment in the project design, he saw no alternative but to abandon the project until the construction climate improved.
At one point, construction prices could be locked in for 30, 60, or 90 days. Today’s construction environment has not only brought increased costs, but also the fact that cost pricing is now generally only guaranteed for 7 days. Such limited pricing guarantees often force Owners into premature project decisions. Furthermore, just because you’ve locked in pricing, doesn’t mean you can assume the product will arrive as scheduled. In a recent project nearing completion, plumbing fixtures were scheduled to arrive within two weeks. By the two-week mark, notice instead was received that fixtures would be delayed several months. The Owner was faced with either waiting or going with a lesser quality product.
All of this is to say that the present is one of the most trying times in recent history to build. Ultimately, patience and consistent communication with experienced professionals is key. An important role of the Owner’s Representative is to “quarterback” this communication, and keep everyone centered around the common goal of completing the project. As we enjoy explosive new growth in our cities, we are hopeful that the current costs associated with construction materials and the current labor constraints will dwindle throughout 2022 and beyond.