Shortages of supplies, labor will delay Gulf Coast rebuilding

September 8, 2021

Hurricane Ida battered the Gulf Coast at a time when contractors already were struggling with severe worker shortages and supply chain issues. The damage caused by the hurricane has amplified those challenges, according to apnews.com.

The struggle to find enough skilled workers and materials likely will increase costs, complicate planning and delay reconstruction for months.

When the COVID-19 pandemic began in March 2020, a brutal but brief recession hit, followed by a strong economic rebound that caught businesses off-guard by a surge in customer demand. This led to labor and supply shortages, and for months, businesses have been scrambling to acquire enough supplies and recall workers they furloughed during the recession.

Construction companies particularly have been affected. Among building executives surveyed by real estate research firm Zonda last month, 93% complained of supply shortages, and 74% said they lacked enough workers.

Adding Hurricane Ida to the existing struggle has made it worse.

“Natural disasters do cause a strain on building materials, reconstruction materials and on labor,” said Ali Wolf, chief economist for Zonda. “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.”

As a result, the cost of materials and supplies has been surging. Combined prices for windows, doors, roofing and other building products jumped 13% during the first six months of 2021; before 2020, such aggregate prices typically would rise a bit more than 1% annually during the first six months of a year.

Henry D’Esposito, who leads construction research at real estate services company JLL, said the most difficult challenge in rebuilding now is the delays in acquiring drywall, glass, steel, aluminum and other materials.

“A lot of the materials that you would need for any project and especially something this urgent—you’re not able to get on site for weeks or months,” D’Esposito said.

Jacob Hodges, co-owner of a family roofing business in Houma, La., said shingles are in such short supply that it is hard to buy them in the same color consistently, and he and his customers take what they can get.

Additionally, workers are in short supply, and contractors must be prepared to offer competitive pay. Robert Maddox, owner of Hahn Roofing in Boyce, La., said typical pay for roofing workers has soared 20% during the past year, with some earning $400 per day.

Hodges said with the severe hurricane damage, as well as worker and supply shortages, reconstruction is expected to be slow.

“To get everything back like it was,” he said, “you’re talking ... well, we’ll probably be working on this this time next year.”

Tags: Business | Workforce

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