The current global material supply chain crisis has impacted nearly every industry in one way or another. As roofing projects and new construction are delayed, repair and maintenance requests continue to grow without the supply to meet such demand. Uncovering the cause of these issues requires understanding the process of producing and delivering critical materials to the roofing industry.
Supply chains are what get businesses the materials they need to operate efficiently. When they are affected by issues such as shortages and delays, the end-users suffer most. As of 2022, the largest roofing supply market is the Asia Pacific region, which means that something as simple as a shingle must travel thousands of miles by land, sea, and air before arriving at a warehouse for delivery to a job site.
Despite the complexity of the route from production to delivery, material supply chain issues were rare until recent years. Manufacturing delays due to chip shortages and extreme weather conditions at production sites have combined with labor shortages and travel restrictions stemming from the COVID-19 pandemic.
The impact across the roofing industry have proven immense, but both production and inventory are steadily ramping back up with projections for a strong global roofing market on the horizon.
Why The Roofing Supply Chain Has Slowed
Both travel bans and lockdowns during the pandemic, which are ongoing in parts of Asia Pacific such as China, gave rise to many current supply chain issues. However, these are not the only sources of disruption. Overall, the supply chain crisis was caused by massive shifts in supply and demand along with additional strains on a distribution network that was already at near-full capacity.
Some industries that require fewer materials or have financially viable options locally weren’t hit nearly as hard as the construction and roofing sectors. Completing a roofing job often requires multiple materials from vastly different origins. Some of the roofing materials impacted by delays include:
- Construction-grade materials, such as wood or metal
- Adhesives, fasteners, TPO-based products, and spray foam
- Specialized tools and roofing software used only within this industry
Overlapping demand for these materials is another source of the roofing material shortage. The housing market is currently struggling with low inventory, and new construction is being completed as fast as possible. Heavy machinery manufacturers provide another point of overlap, as they also demand metal and specialty devices that use the same resources needed to produce vital roofing materials. In combination, these factors have furthered delays.
Global Manufacturing Delays
As the COVID-19 pandemic first spread in China, six of the top 10 global steel producers were under total lockdown or operating with minimal staff following new guidelines. Alternative producers quickly became overwhelmed until the pandemic reached their region as well and production had to pause. Even ArcelorMittal, the second-largest steel producer with facilities spread across several countries, was unable to keep up with demand.
Each of these delays directly led to higher prices at each point along the supply chain — prices that were ultimately passed down to customers. Items unique to the roofing industry have thankfully seen less inventory loss compared to more in-demand items, such as copper wire, steel, and lumber. Roofing membranes are one such example as they do not have specialized uses, but can be made from different materials. Materials such as PVC, TPO, and EPDM have allowed roofing companies to swap products as needed.
Chip Shortages Reducing Material Production
While some products can be made from alternative materials, others cannot without sacrificing quality or safety. Currently, one of the most impactful products subject to delays is the semiconductor chip. Semiconductors are used in nearly every electronic device, including navigation systems, warehouse automation, production equipment, communication devices, and vehicle computers — all of which require a chip to function. Due to this shortage, the costs of semiconductors have become prohibitive for some manufacturers. This has led to the shutdown of key material production sites, which cost the automotive industry alone over $200 billion.
As the technology industry suffers from the extra pressure of schools and offices leveraging remote class and work, personal electronic sales have jumped by over 50%. At present, every instance of supply falling short of demand leads to a redirect of materials. Redirection further creates additional delays in the global supply chain. This affects the roofing industry in many direct ways, including:
- Manufacturing slowdown: As companies deal with the chip shortages, they may find it more difficult to repair machines on their manufacturing lines or purchase newer equipment.
- Distribution issues: Warehouses may find themselves lacking the necessary computer equipment to track, process and distribute materials as needed.
- Lack of equipment: For roofers working directly with customers, the chip shortage can affect the availability of some equipment, including basic tools such as air compressors and drills. Equipment repair can also be affected negatively.
The ripple effects of the supply chain crisis will continue to be felt even after its projected end in 2023. With a limited number of transportation avenues and supply companies available, any delay can quickly snowball into material shortages as each stage of the supply chain falls further behind demand. But as the production of materials starts ramping back up, the eyes of industry are now set on the horizon and how to prepare for future supply and labor shortages.
Murphy’s Law and the Supply Chain Shortage
Supply and demand are the basis of how any economy operates, with both sides following a predictable ebb and flow. The pandemic quickly threw the system off-balance even as a series of other disruptive events occurred. Geopolitical issues, such as trade competition between China and the United States, crippled imports and inflated material pricing from the remaining suppliers. The Russia-Ukraine conflict has also limited exports of Ukrainian iron ore, which is needed in the production of steel.
In 2019, a chemical fire erupted at an ITC plant in Texas that polluted a nearby canal leading into the Gulf of Mexico. The port had to be closed, which severely impacted the ability of nearby companies to deliver their products. Early 2021 also brought severe winter weather and freezing temperatures to Texas, which froze methylene diphenyl diisocyanate (MDI) pipelines — a resource needed to create insulation boards, foam roofing spray, and adhesives used for roofing.
What Supply Chain Shortages Mean for the Roofing Industry
Supply chain shortages mean that many roofing projects will suffer delays. In worst cases, the delays will also lead to projects going over budget. Not only does that increase costs for contractors and raise prices for clients, but it can also damage a contractor’s reputation.
At the same time, this period of supply chain shortages is driving innovation and outside-the-box thinking by manufacturers. This includes exploring the possibility of using new and more readily available materials to avoid supply issues in the future.
How Roofing Technology Can Help Your Company During This Crisis
It’s Jobba Trade Technologies’ belief everybody involved in the roofing industry should have the tools they need to succeed. We provide contractors, manufacturers, and consultants with top-tier tools and solutions to help them thrive.
Jobba’s roofing software is designed to help you grow. We have developed new roofing software to identify trends and help businesses generate more accurate estimates and timelines. With features such as estimating tools, customer relationship management (CRM), and scheduling, projects can be scheduled based on current supplies to better set client and customer expectations for projects of any scale. Learn more about Jobba’s features or request a demo to see it in action in real-time.
If you are interested in learning more about how Jobba can help your organization grow and prosper, fill out the quick form below and watch our 5-minute introductory video.