Home Featured Construction Balancing Act

Balancing Act

Renovation Professionals Balance Soaring Project Demand with Supply Challenges

SHARE
As people spent more time at home with increased disposable income, reno requests soared. “People prioritized reinvesting in their homes, and that includes me,” says Greg Pointe, principal and sales manager at Full House Renovations.

Over the last couple years, more time spent at home staring at four walls saw Edmonton homeowners looking to spruce things up. Maybe their home needed a facelift, they sought more space or perhaps envisioned a different way to use it. Whatever the reason, construction and renovation service providers have been balancing enormous project demands with uncertainties around supply availability and pricing.

Full House Renovations has been helping Edmonton homeowners customize and reconnect with their homes for over 30 years, performing over $70 million in high-end renovation projects. Already busy prior to the pandemic’s onset, as people spent more time at home with increased disposable income, project requests soared. “People prioritized reinvesting in their homes, and that includes me,” says Greg Pointe, principal and sales manager at Full House Renovations. Their team of 20 professionals handle administration, interior design, architectural technology, cabinetmaking, master carpentry and the trades. “We keep the majority of tradespeople on staff for project timing and quality control measures. We are craftsmen and women with a passion for our business and industry.”

At the same time, Johnathan Granger, owner of Fresh Carpentry & Contracting, went from enjoying steady booking and stable pricing to a three-week lull in project engagement in March of 2020. That quickly ended in an explosion of business. “I’ve never been so busy as I’ve been since then. As of mid-September this year, I was booked into March 2022 already,” says Granger, who takes pride in building client trust and confidence in his ability to add home value through custom renovations and excellent craftsmanship. “Our primary focus is enhancing the functionality and esthetic of the home’s interior and we take on any small, medium-to-large and custom project from building custom cabinetry, to countertops, tile work, creating basement suites, full home renos – anything from the roof down.”

Today’s world tends to be one of checks, balances and corrections. As these contractors enjoyed a surge in business, a cruel twist saw shelves and supply stocks depleted while ships holding supplies were anchored. Pointe says supply chain issues really started to be a problem in 2021 as existing supplies were depleted. “The product shortage problem goes very deep into the global manufacturing sector,” he says. “From raw materials being unavailable, health restrictions limiting worker capacities and shipping container shortages, every piece of every kind of product has been delayed. This will continue into the future until the shelves are full again. The world needs inventory and as we know, product costs rise in response to supply and demand.”

Granger’s experience throughout pandemic uncertainties, price fluctuations and supply issues echo those nationwide challenges. Principally, lumber pricing and availability put pressure on people across the board. While public perception may place blame on labour shortages at the production level, Granger says it goes deeper than that.

“It directly relates to the housing boom that continues in the U.S. When COVID came along, as for-profit contractors Canada’s lumber mills were propositioned by U.S. companies who purchased exorbitant amounts of Canadian lumber. Deals were made that gave them priority through open purchase orders,” says Granger. “This placed a large strain on Canadian builders because supply became really tough. Sometimes there was no availability of lumber and the prices on available lumber were astronomical. I’ve never seen prices like what I’ve seen during this time.”

For instance, Granger recalls a sheet of Oriented Strand Board (OSB) plywood rising in price over weeks from $20 to $100-plus. “That’s an unprecedented increase,” he says. “These issues came from two places. Yes, it’s a supply-and-demand issue. But secondly, the products required to make these materials came into play because of the chemicals, components and glues coming out of Asia we couldn’t get. People who were selling them, if we wanted them, we had to pay more.”

Small and mid-sized carpentry enterprises also lost out in many cases when it came to accessing products like windows and doors. Getting them on time and at a reasonable price was difficult. Granger himself was forced to walk away from a long-standing relationship with his main supplier who became too overwhelmed, suggesting a three-week call return time. “These suppliers have a large volume of customers they sell to,” says Granger. “There’s also been a high staff turnover while people have dealt with pandemic stress, including the staff members’ mental health and well-being. It’s all played in with the extra demand these people are dealing with, often a doubled or tripled workload.”

For those products that are available, it’s pricing increases from 50 to 500 per cent over typical costs that continue to challenge the industry. Full House’s detailed estimate template has been adjusted to account for material cost fluctuations. While the conversations around changes in costs and timelines can be uncomfortable, people have been considerate. “We are scheduling all of our projects based on expected delivery dates for the required materials, working to pre-plan and manage product availability the best we can,” says Pointe. “That lead time has been increased during the pandemic by double or more, simply because of product availability.”

These uncertainties forced Granger to adjust his client agreements in order to manage expectations as well. Prior to pandemic uncertainties, he adhered to standard 30-day cost estimates prior to a project’s start date. “Since the start of pandemic-related price increases, we’ve only been able to hold pricing agreements for seven days max,” says Granger.

Now, prior to agreement, Fresh Carpentry observes a new contingency plan including a discussion that keeps clients informed and on the same page. “Our labour pricing is stable and easily guaranteed,” says Granger. “As far as materials, when we’re booking a distance out, which we’ve been doing all these years, we cannot be responsible for fluctuations in the cost of the materials. People have been very understanding.”

Timeline hurdles are tough for companies that pride themselves on respectfully meeting them. “I can’t say we’ve been late delivering a project through this, rather the project was delayed due to product availability,” says Pointe. In terms of the small percentage of projects delayed or cancelled through uncertain times, it’s likely relieving some pressure for these contractors who are busier than ever. Pointe is not overly concerned. “We are in the renovation business, we problem solve,” he says.

Those considering an upcoming reno project should keep their budget, financial comfort zone, timeline and overall vision for projects in mind. “This lets us know whether each project is viable, something where clients need to expand their budget, or they need to save more and we talk again in six months or a year,” says Granger.

In these times of uncertainty, planning ahead is paramount. “We need to take the time up front to properly plan for the clean and timely execution of projects,” says Pointe. “We will get through this. Our plan is to stay healthy, follow regulations, continue to complete great renovation projects, communicate with our clients and give people a new space to enjoy.”

LEAVE A REPLY