In our previous article, Building Is Changing Right Before Our Eyes, we discussed how we have transformed our homes over the last 20 years or less. The pandemic may have accelerated the demand for spaces that we discussed in our last article such as home offices, or entertainment space, but that is only an accelerant and not the original fire. We set the original fire with our changing lifestyles.
That is what has changed in what we ask for. Now let us look at the changes taking place in the construction industry. An industry changes to meet demand or creates demand that it is prepared to adapt to. The preponderance of changes over the last few decades in our homes has been driven by technology, supply, and demand.
Labor Shortages
You have heard about the labor shortage. In construction this is not news. For a couple of decades, we have seen the decline of younger people joining the construction industry work force. We as an industry have recently started acting seriously over the past ten years. Mike Rowe has been a great asset in this regard! Letting parents and young folks know what is cool – to be able to build things. It takes talent, smarts, and pays well at an early stage of training. The industry is struggling to get younger folks to join ranks and is met with some, but not enough success. That is one big challenge.
Technology’s Role
The industry was able to lose a sizable number of workers years ago as they were replaced largely by technological advances with tools and some techniques of building.
• The addition of hangers, brackets and braces in framing alone has saved hours on a project.
• Power tools no longer require a cord, just a charged battery. This works for all manner of power hand tools making time savings possible, the ‘I no longer have to get off the ladder to change cords’ time saving type of things.
• The introduction of pneumatic tools has replaced the hammer and hand nail need. This saves time as I no longer have to reach into my nailing apron to grab nails, orient them for placement and then strike them three times to complete one nailing. The ‘nail guns’ are loaded and simply place them and pull a trigger once you are done and onto the next.
• Plumbing systems no longer require fitting to be soldered or sweat, they are attached mechanically to a plastic pipe that will outlast any copper pipe, be less expensive and easier to use. This saves hours on a job.
Those hours translate into a person. Technology has saved the industry…until now. The labor shortage is real and not going to be a quick fix.
Let’s look at supply.
By large, supply and demand has always been a rollercoaster. Hurricane Katrina demonstrated that quite succinctly when it came to OSB board and plywood.
• The price of 1 sheet quadrupled in 30 days.
• Aluminum costs have increased by 56% over this last year
• Lumber has seen an increase of 32% in the past year.
Currently, the pandemic has created a whole new level of monkey wrench. Production stopped. No one was allowed to work. Some even chose not to work. That interruption of the supply chain is still sending the system reeling. Another facet of supply is how many related industries were equally impacted.
You name it, it has been a nightmare. From appliances sitting in container ships off California, ceramic tile in New York, granite from Italy, lumber from Canada, steel from everywhere, as well as the downstream products these raw materials represent. Plastic production falls off and PVC pipe and fittings are in short supply. Steel production falls off and the braces, brackets and connectors mentioned above are just not there. A tangled web, no not really, but clearly a supply and demand issue. A year and half ago products would take 2 weeks to get in now we are looking at 8-10 weeks at the very minimum.
We are seeing these delays reflected in the permitting process as well. What used to take 2-3 weeks is now costing us 8-10 weeks of time. As with all the challenges, we can point to more than one reason for this.
• Staffing for plans checkers being one.
• The demand for permits has risen beyond current staffing level’s ability to keep up.
• Across the country, remodeling demand alone has increased 10% + year over year.
It does not sound like much but that is only the ‘tip of the iceberg’ for building departments. Construction overall has increased, and there are no signs of the pace slowing down.
In general, projects not only cost more, they also take longer.
Next month we will be looking at how these shortcomings affect you as the client and your contractors.
