Supply chain issues unlikely to resolve by 2024, construction experts say

Supply chain issues unlikely to resolve by 2024, construction experts say

Construction costs will continue to rise, resulting in a decrease in the desire to start new projects.

Tom Park, Skanska’s vice president for national strategic supply chain said this week during a Skanska presentation on spring construction trends that it is unlikely to see a positive shift in the supply chains, calling current conditions "the new normal."

Park stated that he did not see any improvement to the supply chain in 2018. Manufacturers are sold out until November 2024 and there is no improvement expected through then. When you add that to the discussion about electrification - which is fantastic - the challenge is that the manufacturers are adding more capacity to their factories but not enough to reduce lead times, according to Park.

Park said that supplying HVAC equipment (heating, ventilation, and air conditioning) is easier, but there's still a high demand for air handlers, chillers, and other cooling devices.

Los Angeles is subject to the same conditions as other nationalities

The national trends resonate in Los Angeles. Darrell Torres is Skanska’s senior director of preconstruction in Los Angeles. He said that challenges are seen with materials across the board.

Torres noted that raw materials such as concrete, drywall and steel joints are doing well in L.A. despite the supply chain's volatile delays.

Torres explained that Skanska looks first at the design components while awaiting materials to get an early start on development.

Torres said to L.A. Business First that the building may not be finished yet, but they know the size of switchboards or elevators needed. They want to plan ahead and achieve the schedule.

Don Horn, former director of the Office of Federal High-Performance Buildings in the U.S. General Services Administration, now an advocate of advancing clean-building standards through GreenHornStrategies said that groups are choosing sustainable construction materials as well as operating carbon-neutral building.

Horn stated that the high costs of materials have deterred groups like the GSA from developing new projects. Instead, they are focusing on interior finishes with sustainable features.

Horn stated during the Skanska presentation that 'for GSA, we are not building as much new construction now'. It's more about tenant fit-outs, agencies moving into new space or even leasing space that has these finishes like carpet, ceiling tiles, grid, and installation. These are the key materials to reduce embodied CO2.

Long lead times can be avoided by using sustainable materials

The focus has shifted to the use of sustainable materials that can replace steel and concrete, which are heavy users of carbon in transport and construction.

Myrrh Cplan, Skanska’s national vice-president of sustainability, stated that sustainable construction costs were no longer a barrier.

"At first, there was a lack of materials. She said that sustainable construction products have grown in popularity over the past five years. I don't think there's a problem with offering sustainable materials to clients. Even though the supply chain was disrupted, manufacturers who were the most progressive remained economically sustainable because their products have grown in popularity.

Torres added that the lead times of sustainable materials had 'improved nicely'.

He said that sustainability is more about design. We try to engage with the design team early, regardless of whether the project is low-carbon or zero-carbon. We then have a range of solutions to choose from and we work with the owner and design team so that their schedule is not compromised.

Greener construction is a growing trend among developers

Skanska has completed a sustainable office building in Los Angeles at 9000 Wilshire Blvd. Skanska is currently completing a sustainable office building in Beverly Hills that has achieved WiredScore Platinum certification and is working towards LEED Platinum and Fitwel Certification. The biophilic 50,000-square foot building will integrate green design, enhance indoor air quality, and be more efficient. It includes outdoor workspaces, flexible floor plans, operable window, and a roof deck.

Caplan stated that the health of the occupants is just as important as a zero-emission building.

It's not only the carbon or local purchase variables. She said that a lot of the discussion revolves around the emissions and their relationship to the health of the occupants.

Developers are also looking at sustainable options, such as mass wood. This will create more biophilic environments. Horn says that companies must still complete carbon assessments for wood. The carbon footprint of materials like mass timber is dependent on the source of the timber and the amount carbon used in construction.