We’re all hearing stories about the lack of product availability and market conditions for the construction industry during 2022. The most urgent issue impeding industry progress is shortages involving materials and labor.
How Do Shortages Affect The Construction Industry?
Not having the materials or the personnel to complete a project on time can kill revenues and the bottom line.
- The primary way raw materials shortages affect construction is through major delays in projects. In the best cases, the projects are waiting to begin, but many outstanding projects are awaiting completion and are still short on the needed material.
- Prices are also high at the moment. The increase in demand and supply reduction has caused the cost of raw materials to increase, and it isn’t clear when things will return to normal. This only means the price to complete the project is more than it usually would be for most projects. For others, the cost of outstanding projects has increased, leading to a much higher bill than previously expected.
- Shortages may also be hitting DIYers harder than commercial construction. Construction companies have easier access to raw materials, and major projects will likely be prioritized as new supply comes in. Many of these companies have the funds to handle the increased prices up. For many DIYers, inflated prices will dampen their eagerness to start a new project because of the difficulties of navigating a market with a short supply.
What Are Some Hopeful Trends On The Horizon?
There are some hopeful trends on the construction industry horizon, however.
- Alternative materials in construction will emerge in 2022. There has been a significant improvement in the quality of alternative materials themselves. However, alternative construction materials won’t wholly mitigate supply chain risk, nor are they flawless. The cost of alternative materials can also be an issue.
- Modular construction provides workers the opportunity to practice a trade in a protected environment, and technology plays an important role: not only does it improve productivity, but drones, robotics, and digital tools in construction appeal to young workers. Younger workers will have skills in technology that older construction workers might lack, putting that younger demographic in demand, and helping to boost entry-level wages.
- Mitigating supply chain issues demand resilience, such as increased engagement with suppliers, creating materials reserves, and developing backup suppliers. It’s also important to reconsider the reliance on foreign-made supplies and “just-in-time” materials sourcing and move to establish local and regional suppliers wherever possible.
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