Top Summer ‘21 Supply Chain Challenges

Aug 19, 2021

We are in an era where there is a shortage of everything. The construction industry is no different, especially in Southwest Colorado, where we have seen a significant uptick in new construction. The increased demand and regional supply chain disadvantages, such as the lack of robust transportation channels, have caused prices to spike.

According to data released by the Associated General Contractors (AGC) association, prices are continuing to climb. The results are higher construction costs, longer lead times, project delays, and frustrated home builders and homeowners. The supply chain’s instability and uncertainty and the nationwide labor shortage create a situation where contractors feel compelled to hedge their bets by increasing their estimates to account for future cost increases.

Reasons for the shortages

So, what’s the deal? Why are there such supply chain shortages? First, much of the construction industry is dependent on the global supply chain. Basic materials like tile, flooring, hardware and steel are made overseas. The pandemic wreaked havoc on the supply chain due to lockdowns, labor shortages, transportation bottlenecks, and wild swings in demand. When it became impossible to import, contractors looked to regional and local suppliers to fill the void, putting even more pressure on supply.

Most industry experts believe that this is a relatively short-term trend. Prices have already dropped a bit since the highs we saw in early 2021. They expect prices to continue to decrease as the supply chain stabilizes but doubt that we will see pre-pandemic pricing in 2022, if ever.

Durango Wood Company was able to handle the increased demand in Southwest Colorado relatively well. Because we are a make-to-order millworks company with solid relationships with sawmills and construction material distributors, we could meet our customers’ needs. Even before the pandemic, we carried a healthy amount of inventory to meet our customers’ timelines, which proved to be an effective strategy. Doors and windows lead times are increasing as they are tied more deeply to the global supply chain. But our excellent customer service and strong supplier relationships have certainly helped smooth some of the bumps. But it’s still a bumpy ride!

Streamline requirements and plan in extra time

So, what can you do? Our best advice is to work with your contractor closely to understand costs and timelines. Order your materials early as there is no wiggle room in delivery times. Consider alternatives to materials heavily impacted by the global supply chain disruption. And commit to buying local; supporting businesses in your community allows them to carry more inventory, hire more people, and better support you. Healthy communities require healthy companies, and we must all do our part to create sustainable, local supply chains.

Are you considering building a new home or remodeling your current one? Give us a call or stop by, and we will help you select door, window, and millwork products that bring your vision to life.