Everything about the construction industry, both onsite and offsite including modular, is coming up roses in many ways but shortages and rising prices are bringing with them another problem. Not only is there a labor shortage but now material shortages and delays are forcing many employed construction workers to leave the industry and take other jobs.
Contractors are being told they must wait nearly a year to receive shipments of steel and 4-6 months for roofing materials. Supply chain delays mean contractors are unable to keep workers employed because projects are put on hold. Those skilled workers will leave for a new job if there is a delay. Labor shortages are holding back what should otherwise be a much stronger recovery for the construction sector.
This new labor shortage is not new but the effects of the shortfall are beginning to show up in insurance claims. Unskilled worker shortages are showing up as the number one cause for subcontractor default insurance claims.
Surprise
Builders, developers, and investors may start seeing a smaller percentage of their defaulted projects covered under their insurance carriers’ policies. One thing you should do ASAP is checking with your carrier and confirm what they will cover in case one of your projects defaults.
The current supply chain issues, everything from material shortages to scarce shipping containers, to a shortage of truckers, everything in that supply chain has a significant effect on construction.
The unavailability of building materials and rising costs make it difficult for contractors to budget and plan and now they must figure the shortage of skilled and unskilled labor into the bidding process.
Gary Fleisher is the Managing Director and contributor for Modcoach News.
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