More Than Half of Builders Struggled to Keep Up With Demand in 2021

Despite concerns about the pandemic and material concerns, a majority of builders are optimistic market conditions will improve in 2022, according to ECI Software Solutions.

2 MIN READ

Adobe Stock/Robert Hainer

Four in 10 builders admitted demand outpaced their organization’s ability to meet it at some point in 2021, according to a Residential Home Construction industry survey conducted by cloud-based business management solutions provider ECI Software Solutions. The survey found 55% of the 300 builders surveyed built more homes in 2021 than the previous year.

Despite supply chain delays, material and labor shortages, and other pandemic-related challenges, 72% of respondents expect to build more homes this year. Of that cohort, 23% expect to build “much more” in 2022, according to ECI. The survey found over 60% of builders say the residential building market is growing in their state.

According to respondents, the pandemic—ranked as the No. 1 threat to business—led many builders to implement various changes across their organizations, including making more conservative financial decisions (42%) and increasing prices (38%). Looking ahead to 2022, builders reported material variances—including delays, shortages, and waste—are the top concern for the year ahead, followed by estimate- and schedule-related concerns.

The ECI survey found fewer than one-quarter of builders increased their investment in technology during 2021. According to ECI, the builders who experienced the most revenue growth in 2021 were also most likely to have increased their investment in technology to run their business, specifically project management tools, contract management software, and customer relationship management (CRM).

“It’s great to see that many home builders have managed through the supply chain chaos and labor issues of the past two years and are taking advantage of the huge demand for housing,” says Scott Duman, president of ECI’s Residential Home Construction Group. “Not all builders are coping as well, and there’s a case to be made for technology investments that can help them better manage operations and keep a tighter rein on supplies, schedules, and costs. Home builders should also keep a close eye on interest rates and affordability and take caution for overbuilding.”

The survey found 40% of the 300 respondents build entirely on spec, and another 23% are selling after structures that are mostly complete. Approximately 44% of respondents reported jobsites are sitting idle for more than six days in a typical month.

About the Author

Vincent Salandro

Vincent Salandro is an associate editor for Builder. He covers products for the Journal of Light Construction and also has stories appearing in other Zonda publications. He earned a B.A. in journalism and a B.S. in economics from American University.

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