Senior Consultant
Like many sectors of the construction industry, the roofing industry has been suddenly unnerved by abrupt changes caused by supply chain shortages. Simply put, a supply chain shortage is a condition where the demand for a product or service exceeds the available supply. When this occurs, the market is said to be in a state of disequilibrium. This condition is typically temporary in nature as the product will be replenished and the market regains equilibrium.
So how did this supply chain shortage occur throughout our industry?
According to the roofing industry supply chain experts I have spoken with, the shortage has reached this crescendo caused by some of the following “perfect storm” events:
Have the shortages affected all roofing projects?
Yes, and not only due to difficulties in obtaining primary materials such as membrane and insulation. Roof systems require an array of accessory components for a complete manufacturer and code-compliant installation. Ancillary components include wood nailers, fasteners, adhesives, primers, sealants, metal, bar joists and roof decking among others.
Specific combinations of accessories are tested and form the basis of code approvals. If one key accessory is unavailable, the work must be postponed until material can be received, or a viable workaround achieved. As anticipated, we are seeing a swift increase in substitution requests, and expect this trend to continue for the foreseeable future as contractors attempt to round-up those accessories that are able to be located. This is a rather involved process in coastal wind zones, very severe hail zones and projects with highly specific design requirements such as associated with FM Global or Miami Dade.
It appears the shortages have impacted fasteners and plates (due to the shortage of steel coil stock and the industry reliance on three primary fastener manufacturers), MDI a critical component in the manufacture of polyisocyanurate insulation and poly adhesives, polymers for TPO membranes, and polymers for liquid resign products. Additionally raw material and labor shortages have increased lead times for adhesives and most single-ply and modified bitumen membranes.
According to industry experts we anticipate that this shortage will continue through 2022.
What impact does the shortage have on material pricing?
Industry experts believe the shortage will cause additional price increases beyond those already announced. To date, we have already seen double digit roofing material price increases over the last year and we can expect double digit increases again this year. This is not unlike the lumber industry that saw triple digit increases over the past year.
The severity of pricing increases will vary depending on product classifications, ingredients required for manufacturing, and transportation industry trends.
What impact does the shortage have on schedule?
Project delays of several weeks to several months are likely for many roofing projects. We have seen delays of 4 to 6 weeks up to 8 or 9 months being announced on several projects over the past week, reportedly resulting from depleted insulation and fastener inventory. A troubling lack of MDI to manufacture polyisocyanurate insulation may cause significant delays in most roofing projects.
What can we do to minimize the impact?
Most major roofing manufacturers have issued bulletins or other statements explaining their perspective and impacts on production, delivery, allocations, and/or pricing. Many of these bulletins have detailed information that is beyond the scope of this narrative. These bulletins typically explain how many of the factors described above have impacted company operations and how they are attempting to meet consumer demand.
Other good sources of information include the National Roofing Contractors Association (NRCA), the International Institute of Building Enclosure Consultants (IIBEC), and the Single-ply Roofing Industry (SPRI). The NRCA launched a supply chain shortage information webpage on April 27, 2021, that will become a valuable resource for membership in the coming months
It is important to team-up with trusted partners as the construction landscape continues to evolve. Each project will have unique challenges and pathways to success that will need to be paved. If you are working on an existing project with Benchmark, we encourage you to discuss concerns and challenges with your project manager. If you’re not currently working with a Benchmark project manager, please feel free to reach out to Pat Marshall with questions surrounding this supply chain shortage. Pat can be reached at 319.393.9100 or via e-mail at PMarshall@benchmark-inc.com.