STRUGGLE TO FIND MATERIALS, WORKERS
Construction industry hurt by multiple shortages
The Columbus skyline appears alive with cranes, but down on the ground, problems remain in the construction industry.
While construction demand remains strong in central Ohio and beyond, material and labor shortages are making it difficult for contractors to meet the demand.
An annual survey released Thursday by the Associated General Contractors of America and Autodesk found that 88% of firms are experiencing delays in projects. Among those firms, 75% cite material shortages as the reason, while 61% face labor shortages.
“Market conditions are nowhere near as robust as they were prior to the onset of the pandemic,” said Ken Simonson, the association’s chief economist.
“At the same time, the pandemic and political responses to it are limiting the size of the workforce, leading to labor shortages.”
In a Thursday call discussing the AGC survey, Simonson said one industry staffing study found more job openings in construction today than ever before.
The situation is no better in Ohio. The AGC survey found that 92% of Ohio firms are looking for hourly workers. Of those, 91% report a difficult time filling the positions.
In addition, 77% of Ohio firms said projects have been delayed because of material shortages, while 62% cite worker shortages as the reason for the delays. Many firms cited both.
Despite the serious labor and materials challenges facing the industry, construction projects overall have not slowed during the pandemic. According to Dodge Data and Analytics, which tracks the industry, total construction starts are up 15% in the first seven months of this year compared with the same period in 2020.
With a 30% increase, housing construc
tion leads the way, but commercial and infrastructure construction are also up.
“There are times a surplus of work is our biggest problem,” said Brett Strassel, vice president of operations at Hedrick Brothers Construction in West Palm Beach, Florida, speaking on the AGC call.
“As we moved into 2021, we were hyper-affected by shortages of material and manpower. The work didn’t slow down, but the materials did.”
In Ohio, $12.9 billion in construction projects started in the first seven months of this year, up from $11.9 billion a year ago, according to Dodge.
But the growth is far from even across the state. According to Dodge, $3.9 billion of those projects, about one-third of the total, were in the Columbus area, where construction starts are up 34% over the first seven months of last year.
“If you go around the state, you’ve got pockets blessed with an extremely large amount of work, like central Ohio, and other areas just don’t have the amount of work we do,” said Richard Hobbs, executive vice president of AGC of Ohio.
“No one can compete with the growth going on in central Ohio – that dwarfs what we’re seeing in the rest of the state.”
While some segments of the industry such as retail construction have slowed in Columbus, construction is otherwise on fire throughout the region, led by multiple projects around Ohio State University and Nationwide Children’s Hospital, tech centers in the New Albany
area, apartment buildings across the map, and a boom in industrial buildings southeast of Columbus.
In addition, a handful of transformative individual projects such as Lower.com field and the Hilton hotel tower Downtown have kept the industry humming.
“In terms of demand, it is as strong as it has been in my 20 years for Messer in central Ohio,” said Erin Thompson, a vice president of Messer Construction Co., the Cincinnati-based firm that operates nine other offices including offices in Columbus and Dayton.
“It’s vastly different than a year ago, when project owners were waiting and seeing. Customers are actively engaging us to do work and to get started quickly. I see little hesitancy among clients relative to the market segments we operate in, including health care.”
Josh Corna, chief executive officer and owner of Continental Building Co. in Columbus, agreed that construction demand didn’t slow much during the pandemic in the Columbus region.
“There was a big demand before, and it has continued right along,” he said.
“Retail continues to be slow, but Ohio State and the health care side of things have been exploding. The warehouse/ industrial market is still very strong, along with the data centers being built in New Albany. The residential market continues to be strong, both multifamily and single-family homes.”
Still, contractors acknowledge that getting those projects to the finish line can be a challenge.
“Rising costs have certainly been an issue for the entire construction market over the past several months,” Thompson said. “More significant for the complex projects we build has been the availability of materials. Some of the equipment going into our projects might have hundreds of components, so just one component getting stuck in the supply chain can throw off distribution/shipment.”
Contractors have faced supply chain challenges with all sorts of materials including essentials such as lumber, steel, drywall and insulation. Just as one supply issue appears to be solved, another comes along, Corna said.
“It’s across the board, but we are seeing almost every type of material having unprecedented lead time,” he said. “Metal studs, bar joists, roofing insulation, drywall, have lead times we’ve never seen before …
“Each week, it’s something new. Lumber went way up, then started settling back down, but it took six or eight months for that to happen.”
Even some of the simplest items can cause delays. Strassel noted that Florida is experiencing a shortage of concrete block, for example.
“Never in my 25 years in the field have I ever had a problem not getting (concrete) block that day,” he said. “Now we’re looking at 30 days out.”
While experts expect supply chain issues to gradually be resolved, the same can’t be said about labor issues, which have dogged the industry for years.
“Pricing and lead times, those will kind of work themselves out, but the labor shortage is one the construction industry needs to figure out,” said Corna. jweiker@dispatch.com @Jimweiker