A raw materials shortage coupled with a labor shortage that’s only gotten worse since the pandemic has created some challenging situations for contractors. However, one contractor is offering insight on how this paint shortage might be resolved. On the other hand, it still hasn’t kept other contractors from committing fraud.
3 February, 2022
A rising demand for new homes, coupled with a shortage of building materials, has created some unusually high housing prices and forced some homeowners to move into houses that haven’t been completed. An article initially published in the Wall Street Journal reports that for a while, some builders had to halt sales altogether while they caught up with a backlog due to a shortage of labor and increased housing demand. Just like with paint, supply chain issues coupled with a lack of available skilled tradespeople has caused significant disruptions. It’s pushed the average price of a new home to approximately $416,000, pricing a lot of people out of the market.
Some builders have taken to ordering parts and materials online or sourcing them from merchants such as The Home Depot since they are not available from their usual supply source. On the other side of the door, new homeowners have had to move into homes that aren’t yet complete and may be missing gutters, downspouts, garage doors, or other features.
On the plus side, one builder reported that they expect the market to be “terrific” once supply chain problems are resolved. This will be good news for painting contractors who are able to put a new coat of paint on these homes.
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Kevin Robbins, president of Carolina-based A&K Painting Company, Inc., offered some insight on how paint companies might deal with the current product shortage:
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That well-known labor shortage has been getting worse thanks to Omicron paying unwelcome visits to many construction workers. An article in Construction Dive, citing data from the Washington Post, notes that nearly nine million workers have had to call off either because they were sick themselves, or had to care for someone who was.
One construction company owner noted a loss of between 10 and 15% of the workforce every day. Others have resorted to hiring subs or having managers and executives fill in. In one instance, a company couldn’t schedule workers for a week as the entire office had to quarantine.
One construction company executive added that even in these hard times, it’s important to remember that employee health comes before “getting the job done on time.”
An article posted on NYC Shanty adds that the construction industry is looking for 2.2 million more workers to keep up with demand, so a pandemic-exacerbated labor shortage makes things more difficult in an already tight situation.
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The U.S. Department of Justice has found a St. Paul, Minnesota construction contractor guilty of fraud, money laundering, and aggravated identity theft in connection to a more than $840,000 covid-relief fraud scheme. According to court documents, the contractor, whose license expired in 2019 and was not renewed, submitted fraudulent information to get the PPP loan. When it was denied the first time, he submitted it under another name.
The court documents further stated that instead of using the PPP funds for authorized business expenses such as payroll, he transferred approximately $650,000 to a bank account unrelated to his business and made a $29,000 payment to purchase a Harley-Davidson motorcycle, among other impermissible expenditures and transactions.
The contractor pleaded guilty and will be sentenced at a later date.
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