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

Giants 400 | Sep 9, 2022

Top 90 Hospitality Sector Contractors + CM Firms for 2022

AECOM, Suffolk Construction, STO Building Group, and The Yates Companies top the ranking of the nation's largest hospitality facilities sector contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report. Note: This ranking includes revenue for all hospitality facilities work, including casinos, hotels, and resorts. 

Giants 400 | Sep 9, 2022

Top 80 Hotel Sector Contractors + CM Firms for 2022

AECOM, Suffolk Construction, STO Building Group, and Swinerton top the ranking of the nation's largest hotel and resort sector contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.

| Sep 9, 2022

Add sand shortage to supply chain woes

As if it wasn’t enough to have lumber, windows, doors, and metal pipe in short supply, you can add sand, which is theoretically plentiful on Earth, to the list of construction materials that can be hard to come by.

Senior Living Design | Sep 8, 2022

What’s new with AQ: The top trends in active adult living

Today's 55-or-better buyers are ready to design their lives and their homes as they see fit. With so much growth on tap, builders and developers must stay apprised of trends related to home, environment, and culture of 55+ communities.

| Sep 8, 2022

The Twin Cities’ LGBTQ health clinic moves into a new and improved facility

For more than 50 years, Family Tree Clinic has provided reproductive and sexual health services to underserved populations—from part of an old schoolhouse, until recently.

| Sep 8, 2022

U.S. construction costs expected to rise 14% year over year by close of 2022

Coldwell Banker Richard Ellis (CBRE) is forecasting a 14.1% year-on-year increase in U.S. construction costs by the close of 2022.

Giants 400 | Sep 7, 2022

Top 110 Industrial Sector Contractors + CM Firms for 2022

Clayco, Arco Construction, Ryan Companies, and STO Building Group top the ranking of the nation's largest industrial facility sector contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.

| Sep 7, 2022

Use of GBCI building performance tools rapidly expanding

More than seven billion square feet of project space is now being tracked using Green Business Certification Inc.’s (GBCI’s) Arc performance platform.

| Sep 7, 2022

K-8 school will help students learn by conducting expeditions in their own communities

In August, SHP, an architecture, design, and engineering firm, broke ground on the new Peck Expeditionary Learning School in Greensboro, N.C. Guilford County Schools, one of the country’s 50 largest school districts, tapped SHP based on its track record of educational design.

| Sep 6, 2022

Herbert V. Kohler, Jr. (1939-2022) An incomparable spirit

Dynamic leader and Kohler Co. Executive Chairman Herbert Vollrath Kohler, Jr. passed away on September 3, 2022, in Kohler, Wisconsin.

boombox1
boombox2
native1

More In Category



Resiliency

Austin area evacuation center will double as events venue

A new 45,000 sf FEMA-operated evacuation shelter in the Greater Austin metropolitan area will begin construction this fall. The center will be available to house people in the event of a disaster such as a major hurricane and double as an events venue when not needed for emergency shelter.


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