The construction industry is historically known to be slow to change; however, our Chattanooga construction lawyers see that the industry is working diligently to stay on top of trends as well as making necessary changes to remain competitive. In part one of our article, we discussed big data, green building, and collaborative contracts. In this final section, we will discuss increasing material prices and the labor shortages.
Material Price Increase
Construction prices continue to expand and construction companies are concerned. Trade groups are worried that tariffs on steel and other goods will contribute to the increase as well. According to U.S. Bureau of Labor Statistics, construction material prices are up 5.8 percent from the last year. Despite the steady flow of work, rising costs could lead to contractors’ inability to see more profit. Price fluctuations can make it difficult for contractors to determine pricing when submitting bids. When it comes to an increased cost of materials, contractors are having to absorb the increases and face liabilities for delays under the contract. Additionally, suppliers will likely raise the price of concrete and other materials.
The Labor Shortage
Although construction employment has increased, there’s a smaller pool of candidates. Case in point, the catch-22 of the booming housing market: While there are eager builders and equally eager buyers, the national labor shortage is dramatically slowing down builders. This has resulted in severe home shortages but rapidly increasing home prices. As the labor market tightens, project deadlines are at risk. Furthermore, even when potential job candidates express interest, there’s a noticeable skills gap where the candidate’s experience is not up to par with what the construction company needs. As a result, employers must invest in more training to bridge the gap. As baby boomers retire and younger individuals resist construction as a career option, the industry will continue to contend with a limited supply of skilled workers. Read hiring strategies for ways to beat the labor shortage here.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.