COVID and the Supply Chain – A Builder’s Challenge
For Fichtner Services and most other construction companies, 2020 into 2021 has been unlike any other situation ever experienced. The Coronavirus pandemic, along with a multitude of other issues, created a perfect storm of uncertainty and turmoil for the building industry. These issues have led to extended lead times and unprecedented price increases. We have heard first hand from homeowners, “You can’t possibly blame this delay on Covid”… Well, yes we can. Some of the challenges that we saw and continue to face include:
Delayed trucking/material transport
Even before the pandemic hit, new laws were enacted that led to reduced hours and many drivers leaving the industry that moved building materials all around the country. It was literally an overnight shortage. After Covid took hold it only became worse. Cargo ships bringing in supplies and raw materials are stuck out in harbors due to lack of transport, storage and man power to unload.
Shortage of raw materials needed to make supplies
Resin, aluminum, chemicals and other raw materials needed to make such things as window and door parts are in short supply, which has led to extended lead times, especially for anything that is a custom product. Some manufacturers, including those of shingles and vinyl siding, limited the selection of colors and styles available because they could not keep up with the demand. Sometimes the smallest of parts, like the mechanism inside of a window for instance, holds up the entire window assembly.
Lack of labor
Companies were forced to lay-off employees due to Covid. Factories which once had 4 workers to an area were forced to have only 1 person in the same workspace due to social distancing restrictions. Once things began to settle down and employees were being brought back, many could not or would not return due to safety, child care issues, and expanded unemployment benefits. A recent U.S. Chamber of Commerce poll found that one in three unemployed workers do not expect to return to work in 2021. Even more alarming is the fact that approximately one half of those polled indicated that they have no plans of returning to work at any time in the future.
Increase in demand
With people being forced to stay and work from home, remodeling for a home office or adding a backyard porch for a staycation became a must, which increased demand on labor and materials. Many people who were at home became DIYers and bought out the supply of lumber. After a 10 year building slump since the 2008 financial crisis, demand for new construction homes was up. Others decided since they were home they may as well get some projects done, and what better to do during a pandemic than the exterior.
Due to the above mentioned factors, prices of materials increased dramatically. According to the National Association of Homebuilders, an average of $36,000 was added to a newly built home just for the lumber package alone. Across the board, every distributor that we work with has made 3-4 price increase announcements of 10% or more each time, in 2021 alone! A year ago a sheet of OSB plywood was $8, and it has since shot up to $70. Prices of wood have come down a bit, but it is still 4-5 times the cost of what it was just 1 year ago.
As storms have become more severe, contractors are called upon to repair damaged homes. The recent destruction that Hurricane Ida caused from the Golf Coast up to New England is just one example of a storm that caused an increased demand on the construction industry, for both labor and materials. By the way, is Anne Arundel County the new “tornado alley”???
What does all of this mean for homeowners?
Remodeling projects may be delayed, and then delayed again. Window and door delivery times are especially unreliable. Be prepared to be flexible in both installation time and material choices. Plan ahead, be proactive and don’t wait until a project becomes an emergency, especially with the exterior protective shell of your home. Make sure to leave plenty of time before you really want to have your project completed.
Fichtner Services has continued working ever since the Covid pandemic hit. Roofers were deemed “essential”, and for very good reason, as a few weeks later we were hit locally with a huge wind storm. It has been a challenge keeping all of our workers safe, and thankfully everyone has been thus far. We are very proud of our entire team, working tirelessly to get our customers’ projects completed, from the smallest roof repair, to the full exterior remodel, to the house severely damaged by the recent tornado. Everyone here, from estimators, office staff and mechanics, has done their best to provide the utmost in customer service and job quality in a less than ideal environment. If you see our crews out working or on the road, please give them a thumbs up. They have shown up and stepped up when the community needed them and they truly deserve it! We also thank our loyal customers during these unprecedented times for their patience and grace as we work through this together!