A "big disconnect" between links in both the supply chain and normal construction processes is tormenting builders and slowing business, a leading construction industry analyst said today.
Kathryn Thompson, CEO of the Thompson Research Group, said slowdowns early in the construction process are causing people later in the process to put on the brakes--if they haven't done so already because of delays within their own part of the supply/construction chain. And those factors in turn cause a disconnect between what's happening in certain areas and how those events normally lead other things to happen right away, Thompson told members of the Steel Framing Industry Association (SFIA) during a webinar sponsored by the group.
In a Nov. 19 interview with ProSales, Thompson cited some of the problems:
- Architects say it's taking them far longer to get a permit pulled than in the past.
- Access to concrete trucks is so painful that, in Thompson's hometown of Nashville, Tenn., "If you want a concrete truck for a residential project, you need to wait until the weekend." This comes at a time when concrete manufacturers are working overtime to keep up with demand, she says.
- There's a shortage of architectural glass. Between that and the concrete trucks problem, Thompson says, "If you're late getting those, you'll be late on everything else."
- No longer are we seeing the typical arm-in-arm relationship between sales of ceiling tiles and sales of drywall and other commercial products. Thompson believes the disconnect is occurring because much of the commercial work going on involves multifamily housing, and such places typically don't have ceiling tiles.
- Labor shortages wreak havoc in several professions. There's been a lack of truck drivers for quite a while, Thompson says, but a survey by her group in late summer found that some companies were even having trouble finding people to hangdrywall.
"It just stacks up," Thompson says. "A project that might take nine months before might take 10 to 12 months now."
Thompson also warns that steel prices are likely to drop further even though they've already lost up to 30%. Every other commercial construction category--including ceiling, flooring, wallboard, and shingles--are seeing prices hold steady or go up, she says. Steel, on the other hand, "has everything to do with China" and the economic doldrums there. As a result, she predicts steel prices won't hit their low point until 2016.
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