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.
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
| Oct 30, 2013
15 stellar historic preservation, adaptive reuse, and renovation projects
The winners of the 2013 Reconstruction Awards showcase the best work of distinguished Building Teams, encompassing historic preservation, adaptive reuse, and renovations and additions.
| Oct 30, 2013
11 hot BIM/VDC topics for 2013
If you like to geek out on building information modeling and virtual design and construction, you should enjoy this overview of the top BIM/VDC topics.
| Oct 29, 2013
Increased backlogs, margins lead to renewed optimism in global construction
After prolonged economic uncertainty, a majority of executives in the global engineering and construction sector have fresh confidence in the growth prospects for the industry, according to KPMG International's 2013 Global Construction Survey. A general increase in backlogs and margins is giving cause for optimism across the industry, with further growth anticipated.
| Oct 29, 2013
BIG opens subterranean Danish National Maritime Museum [slideshow]
BIG (Bjarke Ingels Group) has completed the Danish National Maritime Museum in Helsingør. By marrying the crucial historic elements with an innovative concept of galleries and way-finding, BIG’s renovation scheme reflects Denmark's historical and contemporary role as one of the world's leading maritime nations.
| Oct 28, 2013
Urban growth doesn’t have to destroy nature—it can work with it
Our collective desire to live in cities has never been stronger. According to the World Health Organization, 60% of the world’s population will live in a city by 2030. As urban populations swell, what people demand from their cities is evolving.
| Oct 28, 2013
Metal roofs are topping more urban dwellings
Given their durability and ease of use, metal roofs have been a common feature on rural houses for decades. Now they’re becoming an increasingly popular choice on urban dwellings as well.
| Oct 25, 2013
Hoffmann Architects announces launch of U.S. Capitol Dome restoration
The Architect of the Capitol will undertake comprehensive restoration of the 150-year-old cast iron Dome, which has not undergone a complete restoration since 1959-1960.
| Oct 23, 2013
Gehry, Foster join Battersea Power Station redevelopment
Norman Foster and Frank Gehry have been selected to design a retail section within the £8 billion redevelopment of Battersea Power Station in London.
| Oct 23, 2013
Some lesser-known benefits of metal buildings
While the durability of metal as a construction material is widely recognized, some of its other advantages are less commonly acknowledged and appreciated.
| Oct 18, 2013
Meet the winners of BD+C's $5,000 Vision U40 Competition
Fifteen teams competed last week in the first annual Vision U40 Competition at BD+C's Under 40 Leadership Summit in San Francisco. Here are the five winning teams, including the $3,000 grand prize honorees.