The economic recovery appears to be taking hold, and with it comes a rapidly improving construction sector. With the recent spike in housing starts and building projects, companies responsible for delivering construction materials will need to ensure they are taking the most direct route and getting supplies to sites on schedule.
More starts hint at market recovery
After years of a slow-moving housing market, things finally appear to be on the up. Housing starts were sluggish the first few months of the year, but they've shown significant improvement in recent weeks. May starts were up 0.3 percent after two consecutive months of declining numbers, and June's rate was even higher. Housing starts leaped 6.8 percent to a seasonally adjusted annual rate of 914,000 this month, according to recently released government data.
"The outlook for housing continues to brighten as builders respond to increased demand for new homes and rental apartments," said Risk Judson, chairman of the National Association of Home Builders (NAHB).
As market spurs growth, builders face challenges
While numbers are strong, building efforts could be hindered by material shortages. According to recent surveys by the NAHB and the National Lumber and Building Material Dealers Association (NLBMDA), supply constraints are a significant issue for construction teams across the country.
The polls revealed 22 percent of builders reported oriented strand board shortages, while another 20 percent claimed they faced wall board supply challenges. Eighteen percent did not have sufficient access to framing lumber and an additional 18 percent cited a lack of plywood. In regard to most of the products builders were questioned about, the number reporting shortages was significantly higher in May 2013 than in 2012 or 2011.
This situation will pose difficulties for builders aiming to get products completed by a certain date, and the lack of materials has the potential to have a detrimental impact on the rapidly improving housing industry.
"While a nascent housing recovery is underway, as reflected by the modest increase in sales by dealers, it's clear that the ongoing material shortages and price increases being reported by dealers continue to be a cause for concern as we move into the latter half of 2013," said Michael O'Brien, president and CEO of the NLBMDA .
Addressing logistical difficulties
Stalled projects could be a concern for builders that are unable to move forward with new homes thanks to a lack of materials. As such, it is important for suppliers to address the concerns construction teams have, particularly if they've been short on certain supplies for some time.
To better accommodate builders, guarantee they have access to sufficient supplies and ensure they can complete projects in a timely manner, suppliers may need to adjust their own strategies accordingly and determine how they can enhance overall efficiency and speed up delivery times. To achieve these goals, they can rely on route optimization software, which helps them plan the fastest and most fuel-efficient schedule - something that benefits both suppliers and the teams that require these deliveries to continue their projects.