State of the building industry
In February 2020, NAHB Chief Economist Robert Dietz shared data about the upcoming year at the International Builders Show. Dr. Dietz is very conservative in his numbers and nationwide, his numbers showed about a 2% decrease in new home startups.
March of 2020, the world shut down. People were safer at home, trying to make sense of what COVID-19 means and scared of the future.
We thanked our medical profession for keeping us safer. We appreciated our teachers, our employers, our government for finding ways to get us mostly virtual to fill our wants and needs.
And while many people stayed safer at home, they realized they wanted to change how they are living. The uptick of calls of people in our community was almost insane! From wanting a remodeler to add an office area to their home to wanting a pool, to wanting to build a new home, an abundance of people were needing the essential building industry to help, which has we have been begging for more people to come and work in our industry since the end of the recession.
And you did it. You helped so many people be able to modify their living spaces.
But there are underlying stresses.
In 2020, Charlotte County experienced a 24.5% increase in single family permits and the following year, 2021 a 34.9% increase in single family permits. This year, as of July Charlotte County is up 46.4% in single family permits.
This has devastated the building supply chain. Your CDBIA leaders have worked with our state and national associations trying to be able to help. In March 2020, many building supply chain companies shut down to make protective products for the medical field. Products coming from overseas were delayed in ports, as well as because a lack of drivers in trucking even after they were finally allowed back on the roads.
In April 2020, the first kinks in issues arose when lumber prices soared as high as a 300% increase. Then, some window orders went from 6 weeks to 72 weeks. Concrete prices increased by almost 20%, then 40%. Aluminum, garage doors, AC units, and even paint colors were in demand, with little supply.
According to reports from NAHB, the cracks in building supply chain will be felt through mid 2023. While we are an industry that has worked through this pandemic, on jobsites, some of you working twice as hard, cutting your own costs to help your customers, many people outside the building industry do not fully understand what is causing delays.
As you continue through these tough times, trying to help your clients, we want to help provide you tips.
- Please review your contracts. If you have not had your attorney review your contracts since 2022, please set an appointment to meet with your attorney. Members of the CDBIA do have access to free contracts as well as price escalation provision that mentions the volatility in the building supply chain.
- To view these contracts, please click here: https://fhba.com/resources/contracts/
- The biggest complaint we are receiving right now is clients with contracts are not hearing from you. This causes unnecessary concern and fear.
- Customers sometimes just need to hear there is no update. Not responding makes them worry.
- Let your client know how you will be contacting them and when they can expect to heard from you on updates. Set up what works best for you (monthly, bi-weekly, weekly). Even if you are still waiting on product, being proactive with communication will help them know how much they matter to you.
- Some clients will continue to call, email and visit until they hear from you. Having a set time with communication can help let your clients know when is best to contact you with questions.
- When a price increase (or as we are seeing in some areas, a decrease) is presented to you on a project be transparent. Show your clients line by line where the increases are coming from. Your contract should have product increases covered in the contract. For some clients, they need to start working on finding additional resources to cover overages they were not expecting. Let them know as soon as possible so the home is not being held up on final payments.
- Helpful links to share with your customers regarding the building industry:
- Be careful on what you commit. As we saw with many supplies, our industry was blindsided with delays. If you give an estimate date on move in early in the process, many customers do not understand when they cannot move in by that date. Stress to your customers that you may hope to move in by a date, but it could take up to an extra year with delays of product.
- Thank your subs. Many of your subs have stayed loyal to you and have to pass along price increases, delays and are also extremely shorthanded.
And most important- take care of you.
We know you well. Every day you find one more thing to take care of before shutting down the site. You spend hours returning calls, and calling suppliers finding products. There is stress, and in some cases complaints heard every day.
But you need to take care of you and your staff. Make sure you take at least a half hour lunch, or even time to regenerate yourself. Blast music in your car while driving around. Get a quick massage, or even watch some crazy TikToks, or one of the most satisfying- count your blessings. Take a note pad and each day, find some things you are grateful for in your day. This can help make you stronger, and mentally prepare for the day.
One day, we will sit back and be able to share stories with the next generation in our industry and laugh as we share our “war stories” about how we succeeded through the most volatile time in the building industry. Until then, if you have any concerns or stresses we can help you with, please call us, or anyone in your CDBIA family to listen. We are here for you.
Charlotte DeSoto Building Industry Association