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North Bay construction leaders reveal what’s ahead for the building industry

Steve Ronchelli: We see 2022 being very flat. The inflation and the supply-chain issues will keep growth down.

Also, of all the issues created for your business in the past year, which one has been the toughest to deal with, and why?

Cantu: Supply-chain interruptions.

Davis: Supply-chain issues have been the most challenging due to uncertainty of timing on long lead items and continuing shortages and availability, typically “stock” materials.

Dawson: Due to worker shortages, finding appropriate manpower for our project sites, as well as for our company, has required increased patience, fortitude and recruitment resources.

Eddinger: Long lead times and lack of supplies.

Ghilotti: Safety is our No. 1 priority. Making sure all our employees and their families are healthy during this phase of the pandemic is a difficult task, even with all our precautionary measures in the workplace and the field.

Koch: Supply chain. In the manufacturing area, people have still not come back to work and the shortages are industrywide.

Maze: Ongoing COVID-19 and similar illnesses result in frequent sick days.  Between preventive protocols and confirmed cases, GMH Builders need to cover for otherwise lost productivity.

Nelson: The COVID-19 virus has continued to present challenges throughout this past year. The COVID-19 precautionary measures have eased in each county, but the health and safety of each individual still is of upmost priority. Construction is in high demand as owners are getting funding approvals and able to secure loan closings to commence work on their projects. Manpower and material availability are a real challenge with the uptick in COVID-19 cases within the Bay Area, California, and the USA as a whole.

Nordby: The toughest issue for our industry has been the inflation in the costs of construction materials, coupled with supply-chain issues, which hamper the timely availability of those materials.

Ronchelli: The supply-chain issues are the most frustrating. We and the clients understand material and equipment are going to take longer to get. We can deal with the long lead times. It is when you are given a date, months in advance, for delivery, and then a week before that date you get a call saying it has been delayed. Clear communication preserves relationships.

How have the supply and cost of materials changed in the past 12 months? What have you been doing to adjust?

Cantu: Supply has decreased while costs have increased.  Employing best management practices in procurement.

Davis: Cost of materials keeps escalating and lead times/supplies keeps changing. Constant communication with suppliers and key trade subcontractors is important so that we can try and stay on top of the changes and keep our clients informed. For some projects with certain materials and/or equipment that we know will not change, we will pre-order and store so that we know it is in our possession when it is needed.

Dawson: They’ve been erratic and are therefore unpredictable. We often see wild swings in pricing and product availability, which leads to higher prices and longer construction duration. Precision has been aggressively ordering materials in advance and working closely with our subcontractor partners to follow and monitor deliveries carefully.

Eddinger: Lead times are ridiculously long and are not improving. We try to set expectations and order far in advance, but delivery is often disappointing.

Ghilotti: Decrease in supply and increase in price. We’re adjusting by expanding our footprint.

Koch: Steel products have really gone up, as well as copper, ABS piping, lumber. Although, currently, lumber seems to be coming back down.

In ordering a metal building — of which we use a lot — the trend is a 6-to-8-month delivery time from date ordered versus the historical 3 to 4 months. There is no ability to adjust to worldwide steel, lumber, raw material cost increases.

Maze: The cost of materials continues to rise sharply, and lead times continue to surprise us. We preemptively address these challenges by planning, making early inquiries to effectively budget, and making purchases to mitigate project impacts. Additionally, we increased contingency for unforeseen costs and advised clients to do the same.

Nelson: Cost of materials are at an all-time high, coupled with long lead times of material availability and fabrication times has been challenging. Midstate takes a proactive approach by approving the needed materials well in advance so orders can be placed and cost secured.

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