Worcester Business Journal

wbjournal.com | June 27, 2022 | Worcester Business Journal 11 still pretty robust; it's the same across the state and in Boston. Companies that have been sitting on capital are now just getting projects started." ese busy times bring challenges all their own, like a lack of subcontractors, said Brandon Purrington, project man- ager and head of pre-construction for Green Leaf Construction in Leominster. "Everyone is looking for people. Costs are booming, but then there's a labor shortage on the other side. It's harder to get people there," he said. e subcontractor shortage incen- tivizes general contractors to organize their jobs and materials well in advance to have subcontractors look favorably on pricing their jobs, Purrington said. It goes beyond efficient planning only for the client, but for the firm's future projects and labor. "e more organized we are, the more subcontractors will want to work with us and the more money they will make," he said. Purrington sees the long wait times on materials other general contractors are experiencing: steel, lumber, PVC, copper, but added another one to the list as well, rooop units, which hold HVAC mechanical equipment. Previously, he could order them two weeks ahead of time. Now, 18 to 20 weeks is needed, he said. "It's even longer than that if it's some- thing custom," he said. "I just gave one submitted price to a customer, and I gave them what is realistic and told them the unit can't deliver until Q3 of 2023." Rise to the occasion Fontaine and Purrington both see benefit in their firms finding ways to succeed despite the challenges of high construction costs. Both have ramped up communication with clients, their teams, vendors and subcontractors as a result. "Our relationships are stronger with our clients," said Fontaine. "ey see our value in looking out for their projects." e start of those projects now needs to be earlier than ever before. e design-build model is now one more clients see as beneficial, where it was 50/50 before, said Liz Mason of Green Leaf, director of client services. Landlords are understanding more that tenant relationships are affected when they are waiting for a heating system while space sits empty. "ey see how busy the market is and want to mitigate their risk," Mason said. "It's important for them to plan their projects earlier out." Good advice, considering building material costs don't appear to headed in a downward spiral anytime soon. is means only one thing to Fon- taine, who has this strategy: "We plan to continue to plan ahead." W A R C H I T E C T U R E & C O N S T R U C T I O N F O C U S of materials made with petroleum, such as rubber roofing, PVC pipe, or anything made with resin. He said it touches near- ly everything in the industry. All this pulls on project budgets and completion schedules. "Time and money are both be- ing stretched," he said, not just client deadlines, but subcontractors' schedules as well. "e biggest constant is the unknown." Forecasting 101 Climbing costs make it decidedly more difficult to create estimates. Quotes used to be valid for 90 days but are now only good for seven to 14, Fontaine said. In-house resources have been allo- cated to track costs and lead times at Fontaine Bros., involving compiling of information on material pricing, labor pricing from 50 to 60 subcontractors, and vendors and suppliers in the U.S. and across the globe. "ese are the most important pieces of the puzzle," Fontaine said. "We lean in and use that information to get ahead of issues." His company is building the new Shrews- bury Police Station and the new Doherty Memorial High School in Worcester. Not getting ahead of issues means a lot of profit potentially le on the table. At the same time these materials costs are up, the volume of work is right up there with it. "Here in Worcester, we see it down- town," Madigan said. "Construction is Construction cost volatility Construction materials are ranked by historical cost volatility over the past 30 years, though they may swing during any future month or year. Differences in volatility are crucial to developing accurate forecasts and budget projections. LOW-COST VOLATILITY 1-year average change Lead times Flat glass +10% Slight increase Aluminum mill products +33% Stabilizing Insulation materials +18% Increased Lumber & plywood +22% Stabilizing MEDIUM-COST VOLATILITY 1-year average change Lead times Plastic construction products +36% Increased Concrete +10% Increased Steel mill products +74% Increased HIGH-COST VOLATILITY 1-year average change Lead times Gypsum +21% Increased Copper & brass products +24% Slight increase Source: Jones Lang LaSalle's Construction Outlook 2022. Brandon Purrington, project manager at Green Leaf Construction PHOTO | SUSAN SHALHOUB Amazon is building massive distribution centers throughout the country, including this facility in Central Florida. A new home being constructed in Worcester PHOTO | GRANT WELKER

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