The good news: the cargo and transportation snags that have encumbered building material availability this year showed signs of finally easing in September.
The bad news: the lack of material supply and increasing demand for labor are keeping prices high, to the point where manufacturers aren’t willing to hold price quotes for more than a week, if at all.
That, in a nutshell, is the state of the construction market, which the general contractor Consigli lays out in its Market Outlook for October 2021. The Outlook, written by the firm’s Director of Purchasing Peter Capone and Vice President of Preconstruction Jared Lachapelle, sends up red alerts about the availability of six product categories—steel joist, steel deck, MEP equipment, roofing insulation, lab casework, and mineral/rock wool—whose lead times for fabrication after release, as of Sept. 1, ranged from 20 to 40 weeks, with steel joists having the longest wait time.
The Outlook reports a 12 percent average price escalation for the 15 building materials tracked, and anticipates another 3 percent bump through the final quarter of this year. Roofing insulation, roofing membranes, gypsum wallboard, light-gauge metal framing, and glass exceed the overall averages.
As a result of large manufacturers not willing to take risks on escalating prices. “subcontractors are being changed market increases at the time of delivery,” states the report.
![The lead times for several building materials exceeds 20 weeks. Image: Consigli](/sites/default/files/inline-images/Consigli%20October%20Outlook.png)
MANAGING RISK TAKES DISCIPLINE
Consigli’s strategies for risk management include:
•lock in prices with subs that are willing to share risk
•buy in bulk quantities whenever possible
•consider alternative supply sources
•implement stringent quality assurance and control measures
•focus on weekly materials delivery verification
•pre-purchase and warehouse materials
•identify peak manpower needs
•utilize prefabrication that takes labor off site
•partner with trades through design-assist
Consigli thinks labor shortages could get worse in the second half of next year. The severity will depend, in part, on vaccination mandates at a time when a sizable number of construction workers still refuse to be vaccinated. But even a fully vaccinated workforce might struggle to keep pace with construction demand that the pending $1 trillion infrastructure bill, if passed, would further pressure.
The Outlook notes that some manufacturers are focusing their production capacities on commonly used materials like drywall and MEP equipment, which is limiting—and sometimes halting—the production of specialty products. And AEC firms need to be vigilant about maintaining compatibility and quality when manufacturers source products from alternate vendors.
Consigli sees some light at the end of this supply tunnel. Its Outlook notes that steel prices are starting to level off as production increases. But citing the National Roofing Contractors Association, Consigli also cautions that shortages in roofing materials and insulation (whose lead time right now is 24 weeks) will continue through next year because of raw materials supply issues.
Related Stories
Codes and Standards | Apr 25, 2019
Report: Contractors invest $1.6 billion in workforce development annually
ABC members increased training spending 45% from 2013, according to a new report.
Resiliency | Apr 22, 2019
Turner Construction doubles down on jobsite efficiency
The company targets a 50% cut in greenhouse gas emissions and water use from construction activities by 2030.
Building Tech | Apr 19, 2019
Skender, Z Modular reach agreement to fabricate multifamily housing components
Factory to open soon on the southwest side of Chicago.
Contractors | Apr 15, 2019
Do you have a fear of getting 'Uber'd'? Join the club
Exacerbating the AEC talent shortage is the coming mass exodus of baby boomers as they reach retirement age.
Contractors | Apr 15, 2019
Suffolk launches Smart Lab in Los Angeles
The lab will identify, test, and scale new technologies to help advance the construction industry.
Contractors | Apr 11, 2019
The construction industry has a problem, and women are going to solve it
Women currently comprise 9% of the construction industry. Here’s how we will change this to solve one of the industry’s most pressing issues.
Building Tech | Apr 8, 2019
Factory-based construction with no siloes starts with a single source of truth
Working from a single source of truth means every factor of design, procurement, manufacturing, and assembly will be accounted for before the assembly line is turned on.
Contractors | Apr 8, 2019
Employers at risk when using construction equipment not sized for women
As more women enter male-dominated fields, gear supply has not kept up with demand.
Mixed-Use | Apr 7, 2019
Chicago-area joint venture antes up $1 billion for Opportunity Zone development investment
Decennial Group says it’s looking at 250 potential projects, primarily in America’s heartland and rural areas.
AEC Tech | Jan 9, 2019
Our robotic future: Assessing AI's impact on the AEC profession and the built environment
This is the first in a series by Lance Hosey, FAIA, on how automation is disrupting design and construction.