Even though most of the country is open, we still see the ripple effects of how the pandemic affects different industries. For example, if you are in the construction industry, then you see an immediate impact on your ability to access necessary materials and labor. How is your business holding up in current conditions?
The current supply chain crisis makes it hard to find basic supplies at reasonable prices – especially lumber. If you are a home contractor, the lumber shortage and other supply chain issues likely affect your ability to meet your customer’s needs.
Here are a few tips to follow if you want to maintain better client relationships in these unusual circumstances:
By the Numbers: How the Lumber Shortage is Affecting Construction
The price of lumber is shocking: In June 2021, the cash price per thousand board feet of lumber was up 288 percent since April 2020. Prior to the pandemic, this price was usually between $350 and $500. On June 8th, it was $1,391.
Even though wood production is at a 13-year high, the price of lumber and other materials continues to increase. Simply put, COVID-19 brought a staggering increase in demand:
- New housing construction was up 67 percent in June compared to April 2020
- Home improvement sales hit an all-time high in April: a 31 percent increase from pre-pandemic levels.
The materials and lumbar shortages are due to a perfect confluence of factors:
- Global Supply Chain: Suppliers cut production of lumber and unloaded their inventory in fear of a crash that didn’t happen. Additionally, due to the pandemic, the U.S. is also witnessing a delay in importing raw materials from overseas.
- Housing Boom and DIY: At the same time, we see a consistent boom in home improvement projects.
- Other Supply Chain Factors: There have also been new tariffs on Canadian lumber, the blocking of the Suez Canal, and the shutting off of the Colonial Pipeline.
As long as demand remains high, the home improvement industry is unable to build up inventory.
The Effects of The Lumber Shortage
Sawmills slowed production to prepare for a construction and real estate crash that didn’t occur. Now that demand is increasing, manufacturers can’t keep up with it. Even though they are producing as quickly as possible, the inventory is flying off the shelves.
This lumber shortage keeps prices high, and there doesn’t appear to be an end in sight. The predictions indicate that the price per thousand board feet will probably stay between $600 and $1,000 in the long term rather than return to pre-pandemic prices.
Tips for Maintaining Homeowner Relationships During a Supply Shortage
It’s more important than ever to maintain homeowner relationships during this challenging time. Homeowners are anxious to move forward with construction. However, with the ongoing supply chain crisis, scheduling delays will continue.
To help alleviate homeowner stress, be more proactive about maintaining communication and being transparent about the difficulties in the industry right now. Communicating will help allow you to maintain homeowner satisfaction through good communication.
In a recent homeowner survey, the lack of communication was the most common trend to not hiring a contractor. Conversely, when contractors want to strengthen their relationship with homeowners, they often:
- Become open about what is happening
- Offer updates and timelines
- Discuss details about the project
Leverage Industry Demand to Grow Your Business
As a home improvement contractor, there are endless opportunities to grow your business. Our team at Modernize is here to help you navigate the ever-changing conditions in the home improvement industry. Contact us to learn more about lead generation solutions to help you connect with homeowners who want your services.