Price hikes.
Long lead times.
Labor shortages.
Delays.
For the last three years, these terms dominated the day-to-day of any business. Those working in the construction industry were not spared.
Like many others, the building materials industry – which contractors of all types depend on – saw exactly what the COVID-19 pandemic had to offer. Raw materials and commodities became harder – and more expensive – to come by. The same goes for almost every other facet of construction.
As this year inches toward the finish line, it’s natural to wonder about the building materials industry outlook for 2023. In looking at this year so far and the year ahead, both building components manufacturers and contractors need to continue being agile and adaptive.
5 Challenges for the Building Materials Industry Poised to Continue Into 2023
Though 2022 was an easier year than the two preceding, it was not without challenges. To be sure, navigating this past year was not impossible – it just required some creative thinking and patience at times.
Among the most impactful challenges in the building materials industry’s outlook 2022 expected to continue in 2023 include:
- Materials costs
- Transportation
- Supply chain issues
- Labor shortfalls
- Changing codes
1. Materials Costs
This past year got off to a tough start for building materials costs.
Compared to 2021, prices for materials, such as lumber, drywall, steel, etc., were up 20% in January 2022. During the first quarter of this year, overall building materials prices climbed another 8%. The trend of high prices continued into q3-22, albeit at a much slower rate. However, things started changing in q4-22 with materials prices starting to decline.
There is good news, however. Economists are predicting that as economies improve and global trade continues its comeback, material prices should continue to drop in 2023.
2. Transportation
Representing the culmination of inflation, a worker shortage, and higher contracts, U.S. freight costs – primarily within the trucking industry – surged during the pandemic and remained high well into 2022.
Now, the pendulum is swinging back the other way. Freight rates across the board are down, and are poised to stay that way & drop in 2023.
Fueling costs though stale, are still high. Though gas prices are starting to trend downward (at the time this article was written), it’s worth noting they’re about the same as they were one year ago. They are anticipated to continue to fall during the first part of 2023.
3. Supply Chain Issues
Both international and domestic supply chains have been plagued by an unprecedented slowdown met by increased consumer demand.
On both the raw materials and commodities sides of the equation, the supply chain has been characterized for the last two years by:
- Long(er) production times
- Delayed deliveries
- Higher prices
The return to business as usual is underway, and many of the pandemic pressures facing the supply chain are easing up. However, new issues are affecting the supply chain and they are worth noting for 2023:
- The war in Ukraine
- The railroad strike in the U.S.
- Global recession concerns
4. Labor Shortfalls
Another component also directly impacted by the pandemic is the shrinking labor pool.
According to the most recent figures, the construction industry – which includes building materials suppliers – had more than 434,000 job openings this past spring. Making matters more challenging was the number of skilled workers leaving the job market far exceeded the number of those coming in.
With a limited labor pool and skilled workers coming at a premium, building material orders meant longer lead times and higher prices, which eventually made their way to the end user.
Looking ahead, the labor market is expected to be tight during the next year.
5. Changing Codes
A quieter element with a wide impact, changes in building codes also affected the building materials industry in 2022.
For instance, the end of 2021 saw major adjustments to the International Residential Code, which opened the doors to new building requirements in 2022. For building material manufacturers, that meant adjusting processes and products to meet new regulations.
Updates to building codes and material standards are nothing new and they happen like clockwork. This upcoming year won’t be any different.
Meeting Building Materials Industry Challenges of 2022 and Beyond
Regardless of global events, every year will have its challenges for any industry.
Issues in the building materials industry ultimately make their way to the property owner, whether it’s in the form of a higher bill or a longer project schedule. For the contractor – who often serves as an intermediary between the building supply industry’s challenges and a client’s expectations – simplifying and streamlining processes is key to maintaining a steady and predictable workflow.
Having a building materials supplier as a partner opens the doors to savings and protecting the integrity of a project’s timeline through:
- Material savings – Often purchasing in bulk, a building components manufacturer buying power from volume helps you be as cost-effective as possible with a project. In addition, a manufacturer uses precise equipment to fabricate building components, limiting the number of materials needed for an order of items like prefab wall panels or prefab trusses.
- Reduced transportation costs – A one-stop shop of sorts, a building components manufacturer saves you the trouble of going to multiple suppliers to source materials. Instead of paying for multiple deliveries from several suppliers, you’re only dealing with a single entity.
- Streamlined construction – Prefabricated structural components – such
as roof trusses, floor trusses, prefab decks, and prefabricated wall panels – are made for fast construction. Oftentimes, components are part of a construction system developed by the manufacturer, such as our Fast Track Framing System. When part of a project, building component construction systems allow for faster builds with fewer workers.
- Supply chain management – To make the structural components of your project, a components manufacturer has its own supply chain to manage. Instead of you, they’re working with suppliers and navigating any issues that come up.
Ultimately, a partnership with a building components manufacturer means your business has another support system in its corner actively working for your success.
Meeting the State of the Building Materials Industry on Your Terms
The building materials industry is like any other – it’s reactive to market conditions and global events.
While it’s impossible to predict exactly how any year will shake out – familiar challenges or brand new ones – understanding potential impediments and having the right partnerships in place helps you meet each year head-on.
Add North American Truss to Your Team
As a building components supplier serving the Western and Central New York regions and beyond, we understand the needs of local contractors. Our team of dedicated professionals is ready to get to work with your company today. Contact us today to learn more about our services and panel construction method.
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