SUPPLY CHAIN DISRUPTIONS Challenge the Building Industry by Carol Rich
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upply chain problems are wreaking havoc on builders’ scheduling, pricing, ability to find basic building materials — and even the product choices they can offer their buyers. “Supply chain issues are impacting our industry at every level,” says Jon Melchi, executive director of the BIA. “It seems the moment one area gets smoothed out, another arises. This has made it a challenge to schedule labor and there is a real sense of frustration at all levels, including the homebuyer.” Nationally as well as locally, builders are dealing with difficulties finding the products they need to do their jobs. According to Zonda, a housing market research firm, more than 90% of the builders they surveyed in November 2021 reported that they had experienced supply problems. NAHB’s Chief Economist, Robert Dietz, says that builders are reporting shortages of essentials such as windows, doors, flooring, appliances and garage doors.
18 BUILDING INSIDER QUARTER 1 • 2022
The upshot of the spiraling problems caused by supply chain gridlock: slowdowns in workflow and rising home prices. Builders have had to reschedule work crews when material deliveries are delayed, adding complications to their process and extra weeks to project completion. In many cases, builders have had to pass higher prices on to their buyers. And they’ve also had to face buyers who are upset about wait times and shrinking product choices. “The price and availability of building materials, and the supply chain in general, remains the most pressing, immediate challenge for builders as they seek to add housing supply,” said Chuck Fowke, chairman of NAHB and a custom home builder from Tampa. What’s behind the supply chain snarl? Issues related to the pandemic have caused factories to close or run at low capacity. Factors ranging from truck driver shortages to weather-related incidents to cargo piling up at ports, have kept products and building
materials out of builders’ hands. Nationally, while supply side challenges caused single-family starts to slow in December 2021, starts still managed to post double-digit gains during all of last year. In 2021 in central Ohio, home prices and sales hit record highs. And according to realtor.com, Columbus is projected to continue this trend in 2022. A strong job market is attracting people to our area, and that will only grow stronger since Intel’s semiconductor plant will bring thousands of jobs to central Ohio in the next few years.
How builders are coping With a strong number of prospective buyers, and inventory at historic lows, builders are scrambling to find coping strategies and workarounds so they can meet market demand. For example, builders have sought out different suppliers when they’re unable to purchase needed products
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