Your 2022 Roofing Project: What You Can Expect
The COVID-19 pandemic wreaked havoc on supply chains. The roofing industry was not exempt from this struggle. Natural disasters, production halted by sick workers, a truck driver shortage, raw material shipments stalled in ports – all of this resulted in an industry-crippling trifecta: limited materials, escalating prices, and delivery delays.
When Jon Reiss, D. C. Taylor Co.’s Vice President Procurement & Logistics, was asked if the situation has changed much since Spring 2021, he replied honestly saying, “It’s a whole different kind of bad.”
Despite 10 months of dealing with these challenges, Dodge Data & Analytics is forecasting a six percent increase in construction starts for 2022. “There is still solid demand for roofing projects,” says Reiss.
Roofing Material Prices Continue to Rise
In December, NRCA shared Associated Builders and Contractors’ data that nonresidential construction material prices had increased 24.5 percent in 2021. If there’s a glimmer of hope, it’s that the constant warning of price hikes from manufacturers have slowed. “For a while, it was monthly. Now we’re seeing it quarterly. That’s a little bit of an improvement,” Reiss says optimistically. While prices aren’t wildly changing, Reiss notes they are still steadily increasing. Manufacturers are trying to predict and keep pricing within a certain range during the quarter, but their predictions aren’t always accurate, and prices sometimes still exceed the estimated increase.
Roofing Materials are Still in Short Supply
Some manufacturers are relying on local reps to divvy up regional material allocations now. “Companies are manufacturing as much product as they can and leaving it up to regional reps to distribute,” Reiss explains. “On one hand, if you’re in a high-volume region, it may be tough to get materials allocated to you; however, if you’ve had good sales in the past, you may come out well.” It all depends on the criteria the rep is using to justify who gets what.
While this approach puts manufacturer’s reps in a difficult position, Reiss notes that when they tell you you’re getting materials allocated for a project, the dates of delivery are more reliable. So, while the materials may still be difficult to procure, at least you can count on their arrival and begin scheduling your project.
Long Lead Times for Materials Remain a Problem
“We have to forecast way out ahead and hope the manufacturer’s rep can get that allocation for us,” say Reiss. “Lead times vary widely. The quickest turnaround I’ve seen is 60 days for modified or asphalt products; there’s not a big push for those. We’re still looking at six months for most everything else.”
How D. C. Taylor Co. is Responding
Having delivered roofing solutions to customers since 1954, D. C. Taylor Co. is familiar with navigating the business through challenging times. Some of the company’s approaches have been typical, others creative, but always with an aim to keep delivering quality roofing installations and services that keep its roofing crews busy.
Setting reasonable expectations with customers is a must.
Contracts now include price escalation clauses. “The sales team has gotten more comfortable telling customers that we don’t know when we’ll have materials or the final cost. This has been going on for 10 months. Customers understand. This isn’t just a roofing problem. It’s happening with everything,” notes Reiss.
The other strategy that’s keeping projects rolling, is providing customers with alternative scopes of work. “Maybe a customer has something they’d like to do but it’s not feasible with the materials that are available. We’re still giving them a good product, but it might not be what we’d initially propose. Sometimes it’s a recover vs. a tear-off,” he says. Likewise, D. C. Taylor Co. will help customers divvy up large projects into more manageable phases if customers aren’t able to absorb the 15- to 20-percent increase in materials.
Carrying more inventory has helped.
D. C. Taylor Co. has seven times more inventory than they had pre-pandemic. “When we buy materials early, we save on price increases,” notes Reiss. “We’ve absorbed additional inventory and rented additional warehouse space that we’ll keep throughout the first quarter. Those are costs we must take on. We’re becoming a de facto distributor and distributing materials to our jobs from here.”
Obtaining this material hasn’t been easy or predictable. “Some contractors have ordered from three different manufacturers and then cancel the others if they get one order delivered. A distributor or manufacturer may call me and be like, ‘I’ve got 5 trucks of insulation.’ If we have the space, we’ll take it,” explains Reiss. The company has also obtained some materials in non-traditional sizes to keep projects moving forward.
The company normally relied on manufacturers to transport materials to the jobsite for them. “We’re hauling way more than we usually do for projects. We’re either delivering ourselves or paying a third party to deliver,” he adds.
The ideal situation is when a customer can store materials either onsite at their location or at a nearby facility – ideally indoors. But when that’s not an option, D. C. Taylor Co. will store and deliver the materials to the jobsite by whatever means necessary.
Expanding the number of suppliers increases odds of obtaining materials.
D. C. Taylor Co. has built relationships with new suppliers during the pandemic. “We’ve started working with a major manufacturer we haven’t done a lot of work with over the past 10 years,” says Riess. “I’ve gotten to know their rep and we’ve gotten materials sometimes within a month and a half.” Additionally, the company found a new standing seam metal supplier based in Iowa and a company that sells odd lots of insulation from a major manufacturer. These partnerships will prove beneficial long after the pandemic is a thing of the past.
This is the New Normal for 2022
While everyone grows weary from news of another COVID-19 variant, the roofing industry isn’t forecasting a resolution to these challenges any time soon. Reiss and other leadership at D. C. Taylor Co. are not worried though. “It is slowly stabilizing,” he says. “I have seen a little more promise. As long as they can continue to manufacture the material we need and not have major disruptions, we’re going to keep making baby steps.”
Supply will level out eventually, but whether material costs will decrease to previous levels is doubtful. “The price of materials hasn’t changed much in the last 10-15 years. It stayed stagnant,” reflects Reiss. “The manufacturers have an opportunity to make some revenue that they haven’t been able to in the past. They’re finally making what they want to.” The abrupt correction may have taken everyone by surprise, but it could become our new normal for the foreseeable future.
For more on all factors plaguing the roofing industry and the impact to customers, read our April 2021 assessment here.
To schedule your roofing project, contact D. C. Taylor Co. at 319.731.4118.