Although much emphasis has been placed on the technology industry, the truth is that the Construction sector does not escape the stakes suffered by the supply chain either. The COVID-19 pandemic has been unleashing a domino effect that fully affects our sector, up to the point that, according to data from the National Construction Confederation (CNC), 40% of the sector has paralyzed or canceled their projects, although fortunately it is not our case.
The study, carried out among more than 300 companies in the country, confirms what we had been detecting for months: there are delays or even shortages of some raw materials, which makes it extremely difficult to continue many projects already started or to start other planned ones, which therefore, are committed/affected.
About 75.6% of the companies in the sector have suffered these shortages or unusual delays in raw materials as essential as aluminum for exterior carpentry, steel or concrete, to which must be added those of the machinery. At the same time, suppliers are registering delays of more than 80 days in the delivery of sanitary appliances or taps, and of almost 70 days in electrical home-appliances.
The problem of inflation
As if that were not enough, the negative impact derived from delays or shortages of materials, we must add the way in which inflation has skyrocketed. On average, the Construction Employers’ Association affirms that the increase in the cost of materials, as well as maritime transport, has led to the increase in the total cost of a work, which has been above 22%.
Among the materials that have become more expensive, wood stands out, with a rise of 125%. Slightly behind, are elements as basic for construction as stone, which has become more expensive by 68%, or copper, with a price increase of 63%. In general terms, the price of industrial metals has increased by about 20%.
This conjuncture, along with skyrocketing electricity and fuel, is causing many of the budgets that were given in the past to become obsolete.
Blues Simon Group’s reaction
Although it would be naive not to admit that this situation also affects us, at Blues Simon Group we do everything in our power, so that its impact does not reach our Clients. The anticipation that we have had in the provision, as well as our own business model, means that we can face the situation in better conditions than other companies.
As we saw in the previous article with the problem of the lack of labor, our own nature allows us to weather the storm with ease. With regard to the supply chain, something similar happens: the fact that our business model, closely linked to the construction of single-family homes, has a strong artisan philosophy, means that we do not need materials in such industrial quantities as other construction companies.
At the same time, the firm commitment to bet on local manufacturers as much as possible is also a factor that makes us more resilient to the current situation. This point is the key, i.e., that of good harmony and the close ties that Blues Simon Group has always maintained with its ecosystem of partners(suppliers, architecture studios, developers …) thanks to which the efforts are redoubled not to transfer inflation to the Client.
Last but not least, the continuous communication with our Clients and the closeness that we have always forged with them, creates the necessary climate to face the situation together in case of having to extend delivery times somewhat, with the full transparency that always accompanies the Blues Simon Group’s hallmark.