Page 29 - BusinessWest December 26, 2022

Bill Laplante says demand has been up for new homes and remodels alike, despite rising interest rates.
a really strong outlook for 2023 with the jobs we have in the pipeline.”
He agreed, though, that supply and cost chal- lenges have been discouraging.
“Some materials, things like plastic pipe and conduit, have increased five times the cost. It’s not as simple as a 8% or 9% increase here and there; for some materials, it’s completely off the charts. It makes it difficult to sign a contract and build a house, when you’re not going to be pur- chasing those materials for four months, not knowing where things are truly going to land. Obviously, once costs go up, you try to plan for the next house.
“The supply-chain issues have been brutal over the last couple years,” he went on. “It seems like it’s something different every week. You can’t get the plastic for the buckets for drywall cement. Then the next week, you can’t get runners for
cabinet drawers. The next week, you can’t get a hinge. That’s been very, very difficult. Plus, a lot more planning goes into it, with the increased lead times for windows, doors, and appliances. We need to get selections a lot sooner than we would from our customers so we can get orders placed. With high-end appliances, we’re out 10 to 12 months.”
Fontaine echoed those sentiments. “Lead times are still challenging. There are some items getting better, which is good, and most items are not getting worse, which is also good. But we’re still seeing a lot of difficulty with items like elec- tronic components, chips, boards, stuff like that. That’s affecting things like rooftop units, electri- cal equipment, and generators.
“For us, it’s not anything that’s stopped our projects from opening on time,” he added, “just something we’ve had to pay much more atten-
tion to, and we’ve become more creative with how we procure things and meet our schedules.”
Ups and Downs
Despite reports that some area contractors had a strong 2022, rising interest rates are expect- ed to impact construction nationally in 2022. The 2023 Dodge Construction Outlook predicts U.S. construction starts will drop by 3% next year. Meanwhile, the Architecture Billings Index,
a forward-looking indicator for construction activity, dropped significantly in October after
“There’s got to be more emphasis put on job training and vocational schools. The opportunities out there for tradespeople, and what a skilled tradesperson can make, are incredible.”
20 months of positive growth. And the Associ- ated Builders and Contractors backlog indica- tor, which tracks work construction firms have booked but haven’t yet begun, fell below its pre- pandemic reading from February 2020, largely due to a decline in the commercial and institu- tional category.
“The construction sector has already started to feel the impact of rising interest rates,” said Richard Branch, chief economist at Dodge. “The Federal Reserve’s ongoing battle with inflation
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DECEMBER 26, 2022 29