One Year Later: Predictions and Projections
“This past year or more probably has been the most disruptive force that our nation has ever experienced. The changes have reached into every home, every business, every social organization, and every aspect of our culture.”
- Barry LePatner, Founder/Partner, LePatner & Associates, LPP
The Future of Remote Work
The shift toward remote work was one of the broadest and most fundamental impacts of 2020. Looking back, LePatner notes it’s important to remember just how game-changing the pandemic has been—not just to construction but also to every industry and facet of life. “This past year or more probably has been the most disruptive force that our nation has ever experienced,” he says. “The changes have reached into every home, every business, every social organization, and every aspect of our culture.”
While some construction professionals had to continue working together in person depending on their roles, others, such as designers and architects, moved entirely to telecommuting. Every company and organization handled the changes a little differently. “As a government entity, there is a lot of paper involved in the tasks we do each day,” says Christopher Haite, managing civil engineer at the Metropolitan Water Reclamation District of Chicago. “We had to think about how to complete those paper-based tasks virtually—and make sure everyone was working in similar ways, for consistency.”
Looking ahead, Haite isn’t sure whether his organization will continue having many people work from home—but the experience has been revealing. “We found that certain jobs can be done at home just as efficiently as in the office,” he says, “and often, workers appreciate the time and cost savings of eliminating their commute.”
In private and commercial companies, though, there’s a more significant push toward a mobile work environment. “The pandemic has pushed us toward a technological shift,” says Barry LePatner, founder/partner at LePatner & Associates, LPP. “That’s significant because, in our industry, people are traditionally not comfortable with change.”
Supply Chain Impacts
As a consultant, LePatner has spoken with many industry leaders over the past year. “What permeated the minds of all of these leaders was a combination of fear, uncertainty, and doubt,” he says. “The biggest challenge that has confronted everyone is the question of how we identify and manage risk.”
Risk management continues to be a challenge for construction leaders, particularly as the cost of materials such as steel and lumber has skyrocketed over the past few quarters. LePatner believes it’s partly because of the U.S.’s dependence on imported materials. “When the pandemic started, one of the first statistics I looked at was the percentage of materials, equipment, and other supplies that are ordered from overseas on most large projects in the U.S.,” he says. “That number is roughly 30 percent, which meant that all ongoing projects of any scale—including some such as schools and warehouses—were going to be severely impacted by supply chain issues.”
Industry studies show that the materials price surges will likely ease by the end of 2021. This is good news, but there’s another layer to the story: “A lot of manufacturers who were taking advantage of lower costs in far-flung countries around the globe are now bringing those factories back to the U.S.,” LePatner says. “It will take them a few years to rebuild and repopulate those factory lines.” When the new factories in place, U.S. construction companies will have a more secure supply chain of materials—but, LePatner warns, the prices are likely to climb again.
Advice to Owners
As owners continue to assess risks and plan new projects, Haite advises increased communication with all stakeholders. “Verify the lead time for materials and manage your project specifications accordingly,” he says. “In the current climate, you might be promised a 10-week wait and then have that extended—which could delay your project. Keep lines of communication open so that your stakeholders on the waiting end don’t get an unwelcome surprise.”
“A lot of manufacturers who were taking advantage of lower costs in far-flung countries around the globe are now bringing those factories back to the U.S.. It will take them a few years to rebuild and repopulate those factory lines.”
- Barry LePatner, Founder/Partner, LePatner & Associates, LPP
Bidding on projects when materials prices are at risk of jumping higher is also a challenge. “We have those situations which are creating uncertainty, making lenders hesitant about future projects,” says LePatner. “We’re still waiting to see whether that hesitancy from the lending community is going to affect construction in the balance of 2021 and the projects that are supposed to go into the ground in 2022.”
Next week, we’ll discuss the possible impacts of the proposed $1.5 trillion national infrastructure package. “If passed, it means the construction industry is going to see a huge infusion of funding,” LePatner says. “Every time our nation has made a significant investment in infrastructure, it got six times the return in terms of growth and expanding our real estate communities.”
WATCH EPISODE 3