A Combination of Factors Contributing to Construction Challenges

As a general contractor in Laredo, TX with years of experience, I can tell you I have never seen the construction industry go through such fluctuations of demand—demand for materials, demand for workers and demand for our service in both new construction and remodels. And to think, it all began with a national pandemic. 

When the pandemic hit in 2020, forcing many Americans to stay home, an uprise is DIY projects, renovations, and even new construction builds, placed a great demand in building materials, such as lumber, steel, copper and even appliances. According to the U.S. Chamber of Commerce’s Commercial Construction Index, this increase in demand caused more than 70% of contractors nationwide to face supply shortages in the first quarter of 2021.

In any other given year, this demand would have been welcomed and embraced, however, this was not a year like any other. The problem came from a lack of manufacturing employees, who were also sent home to quarantine. This of course causing decreases in production—thus causing general contractors to feel a backlog in supplies, and certainly a strain in costs. 

According to a survey by the National Association of Home Builders, of the two dozen items listed in the May 2021 survey, which include appliances, framing lumber, plywood, windows, and doors—just to name a few--twelve were checked as being in short supply by at least 70 percent of the builders. In total, 16 were checked as in short supply by over 60 percent, and 21 were checked as in short supply by over 50 percent. All two dozen were flagged as in short supply by at least 43 percent of the builders. 

Meanwhile, other surveys completed by general contractors showed that: 

• 83% experienced product delays.

• 71% struggled to meet schedule requirements.

• 68% experienced delays expected into Q2 of 2021.

• 58% put in higher bids on projects to keep up with higher costs.

• 39% have turned down work opportunities.

Is there any relief in sight? 

In early December of 2020, the U.S. Commerce Department lowered the tariff on Canadian-imported lumber from 20% to 9%, which could impact pricing. However, increasing demand from home builders and remodelers could keep costs higher, and until manufacturers get production challenges worked out with an appropriate number of employees while the transportation industry works on stabilizing supply channels, such as rail, truck and ships, the issues will continue. 

How is Quantum Building Services Managing the Shortfall?

As we forecast the needs of our clients, and potential clients, Quantum Building Service has always planned appropriately. Our team began forecasting these issues early on studying the market and are well connected with suppliers to make sure we have materials, supplies and equipment available. But rest assure, if there is a problem with materials, we will always communicate with our clients to determine the best option before proceeding. 

Our philosophy has always been one of transparency with our clients with goals one and the same: quality always comes first. 

For more information or to discuss further, feel free to contact me at (956) 568-2846.