Restrictions and lockdowns in different parts of the country forced many businesses to close when the pandemic started. It forced people to stay home to avoid the virus, which resulted in low revenues for businesses.
The situation has improved after over a year since the pandemic started. But businesses are still trying to get back on their feet as the pandemic has yet to end. For small contractors, they had to make changes to deal with the situation.
These changes took into account measures that they needed to implement to protect the health of their employees. Here’s how the pandemic affected small contractors and what they need to do to recover.
Better Management of Supply Chains
The pandemic caused delays in the supply chain as factories closed to contain the virus. This caused delays in the completion of projects in different parts of the country. The disruption stemmed from the slowdown in the manufacturing industry in China, which accounts for around 30 percent of the building materials that the US imports.
Due to this, it’s essential for construction companies and small contractors to improve their supply chain management to prevent similar situations in the future. These providers should find local suppliers of building materials who can provide for their needs even if they cost more.
These companies should also find ways to get their supplies early by paying their suppliers early. In this situation, their suppliers will prioritize them in the delivery of the supplies that they need. Even as it will cost more, the return will be greater since they will finish their projects ahead of time with the availability of building supplies.
Higher Cost of Materials
The cost of materials also increased due to the high demand in the market. This placed small contractors at a disadvantage since they could not compete against bigger construction companies with bigger capital.
To deal with this situation, contractors should have an escalation clause in the contract. The clause allows small contractors to cover increases in the price of building materials. It also allows them to avoid renegotiating a contract once they find that the cost of working on a project has increased. The clause also allows the contractor to avoid out-of-pocket expenses when the price of building materials increases in the middle of the project.
Delays in the project were a major headache for contractors since they were forced to negotiate with insurance carriers after the project went past its completion date. They have to extend the insurance coverage or get a new insurance policy to cover the project. Contracts also contain penalty clauses in case the completion of the project is delayed. This compels contractors to pay the penalty for every day that project completion is delayed.
To avoid this, contractors should ensure they have all the materials at the site when the project begins. This allows contractors to reduce delays in the project since they already have the materials they need. And to reduce the number of trips to the site and speed up the project, contractors should buy flat top trailers online. These trailers are durable and cost-effective. They are also designed for use in construction projects, which makes them ideal for contractors to use.
Implementation of Safety Measures
The pandemic forced many small contractors to implement safety measures to protect the health of their workers. These safety measures required contractors to purchase additional materials to clean and sanitize the tools and equipment that the workers are using. Even as the safety measures meant added expenses, it allowed contractors to save on medical expenses if they got infected while at the project site.
Contractors also had to limit the number of people working at the project site at the same time. This was necessary to ensure they observed physical distancing. One way for contractors to prevent the spread of the virus on the project site is to encourage their workers to get vaccinated.
Higher Labor Costs
The labor shortage during the pandemic affected many industries across the country, including the construction industry. Contractors found it challenging to find skilled labor to work on their projects. Due to this, they had to increase wages to make the industry appealing to workers.
These wage increases affect the profitability of many contractors since it increases salaries and workers’ compensation costs. Unless the costs outweigh their revenue, contractors will have to absorb these expenses to stay afloat.
Even as the construction industry was considerably affected by the pandemic, contractors should find ways to stay afloat until everything goes back to normal.