Shane Napper Shane Napper COURTESY PHOTO

Construction meets a ‘new baseline’ as project costs, labor availability shift industry

BY Sunday, December 19, 2021 07:00pm

As president of Rockford Construction Co. Inc.’s construction division, Shane Napper has played a key part in many of the company’s major projects over the years. Napper has been at Rockford Construction for more than 20 years, and says the industry is now in the middle of a major evolution. That includes an increase in consolidation among design and construction firms as the industry deals with record demand and lingering supply chain obstacles during the COVID-19 pandemic. Napper recently discussed how skyrocketing materials costs are shifting the form of construction projects.

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What are some of the biggest obstacles the construction industry could face in 2022?

As we look at the product side of the business, we still have a challenge with pricing of materials — they continue in some categories to escalate. Some categories hold steady, but they are still up from where they used to be. The cycle of price increases will set a new baseline, and we won’t go back to where it was. We’re never going to get back to where this trend started with a cost model. 

Then we have the added complication of supply and demand above the standard cycle. With the inability to receive materials due to a lack of international synergy, we’re having a hard time getting material moved around the entire world. All industries are having this problem. It’s really continuing to affect construction. Our standard schedules of when we should start thinking about a project is elongated. We just have to start thinking about it earlier. 

Have you had to start using different materials for projects because of lack of availability, long lead times and high prices?

We have taken some current projects and changed the materiality of them. It has challenged us to get creative with what other materials we can use. We’ve been using concrete more, for example, because it’s readily available. 

There has been a shift in the value proposition to build projects. It has to be the most cost effective for clients, but they have a string on their business and have clients asking when can their product get built faster. People are so used to doing things a certain way, but we’ve had to alter materials from what is maybe considered “traditional” materials and look through different lenses.

Do you see construction firms continuing to struggle to fill open positions into next year as well?

Pre-COVID, labor was a big issue in construction. A lot of the rest of the nation is seeing an issue now with labor in sectors that did not previously have that issue. Our (sector) is not like that. We were already struggling with the idea of a lack of trade schools and the lack of people going into the trades.

The issue with early retirements that came during COVID, as well as shutdowns and government stimulus that allowed people to make different life choices, had an additional impact on labor. 

What are Rockford Construction and other firms doing to address the talent issue in construction?

We are excited to see some positive movement, but it will be a challenge in this industry for years. Right now we’re working on attraction, getting to young people, and setting that attraction. You’ve really got to show them what your industry is about and drive a level of excitement and intrigue. 

Have labor and materials issues been affecting the scope of many projects?

There is no doubt: Looking at the scale of projects has been a big discussion. At some point, you only have so much money. Sometimes you just take a bigger project and say, ‘let’s set it up so it can be expanded in the future and get the first piece of it built.’ We are really trying to think about scale and how we can be sensible with getting the product online. Projects are being built in longer and more phases.

Read 2244 times Last modified on Friday, 17 December 2021 12:44