flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

A grim Market Outlook foresees more shortages that impede construction

Contractors

A grim Market Outlook foresees more shortages that impede construction

Consigli’s new report, though, does offer glimmers of relief on the supply-chain front, and strategies for risk management.


By John Caulfield, Senior Editor | October 29, 2021
Consigli's latest market outlook expects labor shortages to continue through next year. Image: Pixabay
Labor shortages continue to impact construction projects, and could get worse next year, according to Consigli's latest Market Outlook. Image: Pixabay

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
Consigli identifies several building materials for which there have been “significant” lead time delays and price hikes. Image: Consigli
 

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

| Jan 30, 2014

How reverse engineering nature can spur design innovation

It’s not enough to copy nature. Today’s designers need a deeper understanding of environmental nuance, from the biome in.

| Jan 30, 2014

What to expect in the metal building industry in 2014

Every year brings changes. This one won’t be any different. We’ll see growth in some areas, declines in others. Here’s a little preview of what we’ll be writing about 2014 when 2015 comes rolling in.

| Jan 30, 2014

What's in store for healthcare capital markets in 2014?

Despite the shake up stemming from the Affordable Care Act, 2014 will be an active year in healthcare capital markets, according to real estate experts from CBRE Healthcare.

| Jan 29, 2014

Richard Meier unveils 'urban courtyard' scheme for Mexico City towers

A grand atrium, reaching some 30 stories, highlights the contemporary, bright-white design scheme unveiled this week by Richard Meier & Partners for a new mixed-use development in Mexico City. 

| Jan 29, 2014

Hotel, retail, recreation sectors to lead growth in 2014

AIA's Consensus Construction Forecast, a survey of the nation’s leading construction forecasters, is projecting that spending will see a 5.8% increase in 2014, led by the hotel, retail, and amusement/recreation sectors. 

| Jan 29, 2014

Notre Dame to expand football stadium in largest project in school history

The $400 million Campus Crossroads Project will add more than 750,000 sf of academic, student life, and athletic space in three new buildings attached to the school's iconic football stadium. 

| Jan 28, 2014

White Paper: How metal buildings deliver long-term value to schools

A new white paper from Star Building Systems outlines the benefits of metal buildings for public and private school building projects.

| Jan 28, 2014

First Look: BIG's Honeycomb building for Bahamas resort [slideshow]

BIG + HKS + MDA have unveiled the design for the new Honeycomb building and adjacent plaza in The Bahamas – a 175,000-sf residential facility with a private pool on each balcony.

| Jan 28, 2014

2014 predictions for skyscraper construction: More twisting towers, mega-tall projects, and 'superslim' designs

Experts from the Council on Tall Buildings and Urban Habitat release their 2014 construction forecast for the worldwide high-rise industry. 

| Jan 28, 2014

16 awe-inspiring interior designs from around the world [slideshow]

The International Interior Design Association released the winners of its 4th Annual Global Excellence Awards. Here's a recap of the winning projects.

boombox1
boombox2
native1

More In Category


Museums

The Tampa Museum of Art will soon undergo a $110 million expansion

In Tampa, Fla., the Tampa Museum of Art will soon undergo a 77,904-sf Centennial Expansion project. The museum plans to reach its $110 million fundraising goal by late 2024 or early 2025 and then break ground. Designed by Weiss/Manfredi, and with construction manager The Beck Group, the expansion will redefine the museum’s surrounding site.


Reconstruction & Renovation

Movement to protect historic buildings raises sharp criticism

While the movement to preserve historic buildings has widespread support, it also has some sharp critics with well-funded opposition groups springing up in recent years. Some opponents are linked to the Stand Together Foundation, founded and bankrolled by the Koch family’s conservative philanthropic organization, according to a column in Governing magazine.


halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021