Construction companies in New Louisiana are faced with the rising cost and shortage of materials needed in recovery efforts in New Orleans after Ida.
According to Joe Sobol, owner of Big Easy Construction in New Orleans, the job will cost a lot more than usual–and take much longer too.
Hurricane Ida raged into the Gulf Coast causing damage and destruction before moving on to the northeast at a time when building contractors were already struggling with a shortage of supplies and workers.
Long before Ida hit, the coronavirus had taken a huge toll on the construction industry as shortages caused by delays at every level from the manufacturing of supplies to delivery and a shortage of workers had already driven up the cost considerably.
The number of supplies needed for the major amount of damage left by Ida will likely drive costs up further, complicating planning and delaying construction for months.
“My expectation,” said Ali Wolf, chief economist at the real estate research firm Zonda, “is that it only gets worse from here.”
Lake Charles, Louisiana, some 200 miles west of New Orleans, still has not recovered from the damage left by Hurricane Laura a year ago.
The U.S. experienced a recession directly related to COVID-19 when the whole country went under lockdown in March 2020 bringing businesses of all kinds to a screeching halt.
As the economy started to rebound materials were suddenly in short supply. Businesses across the country have been diligently trying to get enough supplies, restock shelves and establish a workforce lost in the lockdown.
Construction companies had been particularly affected, long before Ida did her damage.
“Natural disasters do cause a strain on building materials, reconstruction materials and on labor,” Wolf said. “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 skyrocketing. Prices for windows, doors, roofing, and other building supplies increased 13% in the first six months of this year, by comparison, those prices would typically increase by a little more than 1% annually, according to the Labor Department data.
Steel mill products rose more than twofold in July from the previous year. Gypsum products, used for drywall, partitions, ceiling tiles, etc were up 22% from the previous year.
Henry D’Esposito, leader of construction research at the real estate services company JLL, said the most difficult challenge in rebuilding now delays in getting drywall, glass, steel, aluminum, and other materials.
“A lot of the materials that you would need for any project and especially something urgent — you’re not able to get on-site for weeks or months,” D’Esposito said.
“We’re having to jump through hoops,” said Robert Maddox, owner of Hahn Roofing in Boyce, Louisiana. “We’re having to pay more for labor. We’re having to pay more for supplies. We’re having to bring supplies in.”
The insurance companies covering the bill for many hurricane repairs can add to the burden, according to Maddox.
“I’ve spent more time fighting with insurance companies over prices than I did roofing houses,” he said.
Workers are also in short supply, such as framers, who build, install and maintain foundations as well as floors and door and window frames; carpenters; electricians; plumbers; and heating and air-conditioning specialists are all difficult to get.
“Workers–they have the power,” Wolf said. “They can go where they can make the most money. So if you need access to workers, you’re going to have to pony up.”
“if you don’t pay them,” he said, “someone else will.”
Complicating matters more, the power is still out in many places, gasoline is in short supply, and the Gulf Coast is sweltering.
Workers have nowhere to stay near the construction sites so they are commuting from an average 3 hours away.
“We’re losing half our time driving, Maddox said.
Maddox said it would be helpful if workers had a place to stay close by.
“These guys don’t mind cold showers,” he said.
“To get everything back like it was,” he said, “you’re talking…well, we’ll probably be working on this this same time next year.”