Ida slammed into Louisiana—then took its destruction to the Northeast—at a time when building contractors were already grappling with severe shortages of workers and depleted supply chains. The damage from Ida has magnified those challenges.
The struggle to find enough skilled workers and materials will likely drive up costs, complicate planning and delay reconstruction for months.
“My expectation,” says Ali Wolf, chief economist at the real estate research firm Zonda, “is that it only gets worse from here.”
The challenges facing construction companies stem from what happened after the nation endured a brutal but brief recession when the viral pandemic erupted in March 2020: The economy rebounded far faster and stronger than anyone expected. Businesses of all kinds were caught off-guard by a surge in customer demand that flowed from an increasingly robust economic recovery.
Workers and supplies were suddenly in short supply. For months now across the economy, businesses have been scrambling to acquire enough supplies, restock their shelves and recall workers they had furloughed during the recession.
Construction companies have been particularly affected. Among building executives Zonda surveyed last month, 93% complained of supply shortages. Seventy-four percent said they lacked enough workers. And that was before Ida struck.
“Natural disasters do cause a strain on building materials, reconstruction materials and on labor,” Wolf says. “The difference today is that the entire supply chain has been battered even before Ida’s occurrence. You really have all these things hitting at the exact same time. Frankly, the last thing the supply chain needed was extra strain.”
A result is that the cost of materials and supplies has been surging. Combined prices for windows, doors, roofing and other building products jumped 13% in the first six months of this year, according to Labor Department data. Before 2020, by contrast, such aggregate prices would typically rise a bit more than 1% annually, on average, in the first six months of a year.
Henry D’Esposito, who leads construction research at the real estate services company JLL, said the toughest challenge in rebuilding now is the delays in acquiring drywall, glass, steel, aluminum and other materials.
“We’re having to jump through hoops,” says Robert Maddox, owner of Hahn Roofing in Boyce. “We’re having to pay more for labor. We’re having to pay more for supplies. We’re having to bring supplies in.”
With nowhere to stay, workers involved in reconstruction have to drive in from afar. Maddox says he has roofers commuting in from Lake Charles, a three-hour drive from the hurricane zone. Read the full story.