Labor and materials challenges proceed to plague building business

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The Columbus skyline seems alive with cranes, but construction issues remain down on the ground.

While construction demand remains strong in central Ohio and beyond, material and labor shortages are making it difficult for contractors to meet demand.

An annual survey published Thursday by Associated General Contractors of America and Autodesk found that 88% of companies are experiencing project delays. Among these companies, 75% cite material shortages as a reason, while 61% face a labor shortage.

“Market conditions are nowhere near as robust as they were before the pandemic broke out,” said Ken Simonson, the association’s chief economist.

“At the same time, the pandemic and the political responses to it are limiting the workforce, leading to a labor shortage.”

In a call on Thursday about the AGC poll, Simonson said an industry personnel study found more jobs in construction today than ever before.

The situation is no better in Ohio. The AGC survey found that 92% of Ohio companies are looking for hourly workers. Of these, 91% report that it is difficult to fill the positions.

In addition, 77% of Ohio companies said projects were delayed due to material shortages, while 62% cite labor shortages as the reason for the delays. Many companies cited both.

Despite the serious work and material challenges facing the industry, overall construction projects have not slowed down during the pandemic. Total housing starts in the first seven months of this year are up 15% compared to the same period in 2020, according to Dodge Data and Analytics, which is tracking the industry.

Residential construction is leading with a plus of 30%, but commercial and infrastructure construction are also increasing.

“Sometimes excess work is our biggest problem,” said Brett Strassel, Vice President of Operations at Hedrick Brothers Construction in West Palm Beach, Fla., Speaking at the AGC appeal.

“At the beginning of 2021 we were severely affected by a shortage of materials and personnel. The work did not slow down, but the materials did. ”

In Ohio, construction projects started $ 12.9 billion in the first seven months of this year, up from $ 11.9 billion a year ago, according to Dodge.

But the growth is nowhere near uniform across the country. Dodge said $ 3.9 billion of those projects, about a third of the total, were in the Columbus area, where home starts rose 34% in the first seven months of last year.

“When you go around the state, you have bags that are extremely laborious, like central Ohio, and other areas just don’t have the amount of work that we have,” said Richard Hobbs, executive vice president of AGC of Ohio.

“Nobody can keep up with the growth in central Ohio – it dwarfs what we’re seeing in the rest of the state.”

While some segments of the industry have slowed down like retail construction in Columbus, construction is otherwise on fire across the region, led by multiple projects around Ohio State University and Nationwide Children’s Hospital, technology centers in the New Albany area, and residential buildings on the whole map, and a boom in industrial buildings southeast of Columbus.

In addition, a handful of individual transformative projects such as Lower.com Field and the Hilton Hotel Tower Downtown have kept the industry going.

“In terms of demand, it is as strong as it has been in my 20 years for Messer in central Ohio,” said Erin Thompson, vice president of Messer Construction Co., the Cincinnati-based company that has nine other offices, including offices in Columbus and Dayton.

“It’s very different from a year ago when the project owners waited and saw. Customers are actively involved so that we can work quickly and get started quickly. “

Josh Corna, chief executive officer and owner of Continental Building Co. in Columbus, agreed that construction demand did not decline much during the pandemic in the Columbus area.

“There was a lot of demand before and it has continued to this day,” he said.

“Retail continues to be slow, but Ohio State and healthcare are exploding. The warehouse / industrial market is still very strong, along with the data centers that are being built in New Albany. The housing market continues to be strong, both multi-family and single-family houses. “

Still, contractors recognize that getting these projects to the finish line can be challenging.

“Rising costs have certainly been an issue for the entire hardware store over the past few months,” said Thompson. “More important to the complex projects we are building was the availability of materials. Some of the equipment that goes into our projects can contain hundreds of components, so only one component gets stuck in the supply chain that can affect distribution / shipping. ”

Contractors faced supply chain challenges with all sorts of materials, including key materials such as wood, steel, drywall and insulation. Just as one supply problem appears to be resolved, another comes along, Corna said.

“It’s across the board, but we see that almost every type of material has unprecedented lead time,” he said. “Metal studs, joists, roof insulation, drywall, have lead times we’ve never seen before …

“It’s something new every week. Wood went up and then settled down again, but it took six or eight months for that to happen.”

Even some of the simplest items can cause delays. Strassel noted that Florida, for example, has a shortage of concrete blocks.

“In my 25 years in the field, I’ve never had a problem not getting a (concrete) block that day,” he said. “Now we’re looking at 30 days.”

While experts expect problems in the supply chain to be resolved gradually, the same cannot be said of work problems that have preoccupied the industry for years.

“Prices and delivery times will work out for themselves, but the labor shortage is one that the construction industry needs to find out,” said Corna.

jweiker@dispatch.com

@JimWeiker