The Dodge Construction Network partnered with Procore Technologies for a study on how economic, workforce and technology trends are transforming the global construction industry. The fenestration and glazing industry has too felt the burden of economic and workforce headwinds over the past few years, which has led to increased prices and labor shortages.

The report, “Top Business Issues for Specialty Contractors,” found that 99% of companies surveyed experienced erosion of their profit margins, one-third of which is tied to unplanned rework.

Additionally, the report stated that “one-third of companies’ revenue is lost to unbillable changes, over 90% report negative impacts due to labor shortages, and 39% are still using spreadsheets, paper forms and other outdated methods to manage key activities, instead of construction-specific software.”

The report’s key finds include:
• Pending retirement requirements will worsen the labor shortage;
• Supply chain issues will continue to afflict the industry;
• There is a sharp need for better financial control and payment processes;
• Poor resource management drives unplanned rework;
• Margin erosion plagues all specialty contractors.

Labor Shortages

Companies surveyed in the report state that an average of 33% of their current workforce is likely to retire in the next five years, which threatens to worsen the situation. Companies are adapting by increasing technology adoption, offsite methods and jobsite automation.

“The labor shortage is the biggest challenge that specialty contractors are facing and the most important problem that I am dedicated to helping solve,” says Will Lehrmann, Procore’s head of product for specialty contractors. “With so much of the workforce leaving, being more efficient and productive will be crucial.”

Cardinal Glass Industries’ facility in Tomah, Wash., for instance, recently added a virtually touchless insulating glass process that helps increase safety and produces high-quality products. The move was to meet increasing demand, says Aaron Arntson, superintendent of Tomah IG.

Automation also lessens the need for additional workers all the while increasing throughput and quality.

Supply Chain Issues

Supply chain issues will continue to affect the industry, the report states. That’s because material prices are volatile, and 31% of specialty contractors say they cannot pass cost increases on to owners on most of their projects. To deal with these challenges, nearly half are raising prices.

Companies within the glass and glazing industry have experienced this issue firsthand. Gilbane, a privately held family-owned construction and real estate development firm, highlighted the problem in its second quarter 2022 Construction Market Conditions Report.

The report states that of the 19 “critical materials” cited as experiencing longer lead times than in previous years, curtainwall ranked as the second-longest with a lead time of nine to 12 months. Other materials related to the building envelope or fenestration industries on the list include roofing (6-9 months), metal panels (3-4 months) and specialty door hardware (3-4 months).

“As the market remains red hot, firms are being more selective with what projects they bid and are having to escalate their numbers,” Gilbane’s report reads. “Projects are slower to complete, primarily due to other trades not getting materials on schedule. A big concern for metal, glass and glazing firms is taking on too much work and then projects being unexpectedly delayed leaving their labor force without work.”