Demand eats supplies Construction: A frenzied pace of homebuilding and commercial development has left builders and suppliers scratching for such essentials as drywall and insulation.

October 25, 1998|By Liz Atwood | Liz Atwood,SUN STAFF

The conveyor belt runs almost nonstop at the Gold Bond Building Products Co. in Southeast Baltimore, ferrying more than a million square feet of drywall a day.

But although the factory's workers are on the production line around-the-clock, it's still not enough to meet the demand.

With the recent frenzy of homebuilding, remodeling and commercial construction, builders and suppliers are reporting shortages of many building products, including drywall, insulation and specialty items such as man-made stone.

"We're going as fast as we can," said Dave Cureton, plant manager of Gold Bond, one of two local factories that produces drywall.

"We've had shortages before, but they never were as severe and long as this one," said Jim Thomas, an insulation contractor who has struggled for six months to fill the orders of his builders.

Normally, the factories that produce insulation build up inventory in the slow winter months but, last winter, construction continued at such a pace that factories could hardly keep up. Besides the new construction, owners of existing homes wanted insulation to make their homes more energy-efficient.

At the beginning of June, the manufacturers started rationing insulation, and Thomas says he has had to curtail his business by 55 percent to 60 percent of what he could sell if he had the supplies. He no longer is taking orders from new builders or selling directly to homeowners; the insulation he gets must go to his longtime customers.

In fact, some insulation installers must resort to buying from Home Depot and other large retailers who have long-term contracts with the makers, he said.

Shortages of building supplies are being reported nationwide, according to the National Association of Home Builders. More than 8 percent of builders responding to a June survey reported problems getting materials. The most common shortages are in insulation and drywall, but in some parts of the country there is a shortage of concrete.

The shortages are fueled by a building season even more robust than predictions. The National Association of Home Builders expects that 1.61 million housing units will be built this year, up from 1.4 million a year ago.

Although a lack of skilled labor is the most pressing concern for builders, they also are troubled by the scarcity of materials, which is requiring them to place orders further in advance to assure the supplies get to the job site on time.

Champ Boone, purchaser for J. F. Johnson Lumber, said drywall usually could be delivered to the store within two days of an order; now it takes more than a week. Insulation could be delivered to the store within a week; now it is taking three or four weeks for delivery.

The shortages of supplies and labor are stretching out the time needed to build a home. Larry Rosenberg, president of Mark Building Co., which builds in Howard and Baltimore counties and Baltimore, said it takes him about four months to build a single-family home instead of the normal three months.

The shortages also are translating into higher costs for contractors and builders, said Scott Adashak, operations manager for Altieri Homes.

Drywall prices have increased more than $1 a sheet in the past month, said Sonny Robinson, with Allstate Building Supply Co. in Lutherville. The amount added to the cost of a new home sounds small: $200 more for drywall for a typical suburban home.

But the numbers add up when other cost increases are considered.

Insulation prices have gone up 30 percent since March. Prices of plywood and Oriented Strand Board, products used for the roof and sheathing of a home, have nearly doubled. Although some price increases are typical during the fall hurricane season, suppliers say the price is steeper than usual because of the building activity.

In March, OSB was selling for less than $6 a sheet. At the end of September it had increased to $11 a sheet, adding $1,000 to the cost of sheathing and roofing a house.

Builders say they are absorbing the added cost of materials because they don't want to risk losing buyers by increasing the cost of homes.

Buyers may also find their home purchases affected in other ways. Some may find their choices of products limited, said Cam Curtis, purchasing manager for Bob Ward Homes. Popular siding colors have been sold out, and unusual brick styles are hard to come by.

"The more common bricks are in such high demand, if you pick something a little bit odd it could take three months to get it," Curtis said.

Unusual widths of insulation are also difficult to find, as manufacturers focus on making the most popular types. And as winter approaches, insulation supplies are not expected to improve.

While builders are lamenting the rising costs and delays, the factories couldn't be happier.

"Obviously, this kind of economy has been very good to us," said Cureton, whose factory employs between 140 and 150 workers -- and is hiring more.

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