Advice for managing today’s labor and materials challenges
Rising materials costs and a shortage of skilled labor have been persistent challenges for years, and they have become more acute in 2020. Here are some helpful tips and strategies for navigating today’s unpredictable building environment while setting your business up for long-term success.
Mitigating materials issues
A 2018 survey from the National Association of Home Builders (NAHB) found that the rising price of building materials was the biggest problem housing developers faced. As the impact of COVID reverberates through global supply chains, the pricing and availability of building supplies have become even more unpredictable.
Adopting practices that provide your business with greater flexibility is like putting on shock absorbers for the bumpy road ahead. Four flexible practices to consider include:
Escalation clauses: Have a construction attorney draft provisions for your contracts that address adjustments of fees and payments to account for fluctuations in materials and labor costs during projects.
Value engineering: Being adept at the art and science of optimizing the selection of materials to give homeowners the features and performance they desire most is more valuable than ever. Value-engineering expertise is critical for optimizing clients’ budgets.
Supplier communication: Staying in touch with suppliers’ and manufacturers’ reps can alert you to potential supply chain issues and help you discover alternative products and value-engineering options that keep your projects on track.
Supplier bonds: These bonds provide guarantees that a supplier will deliver the materials as promised and help protect you financially if they don’t—another instance when the advice of a construction attorney can be a smart investment.