LIHU‘E — Construction is booming on Kaua‘i, but snags are complicating the workflow.
“I’ve never seen it so busy,” said Mike Nishida, general manager at the Kaua‘i branch of Alpha Electric. “Lately, it’s been a lot of new residential going up.”
New construction should mean big business for the electrical supply company, however, before Nishida can get materials out to contractors, he has one big problem to solve: how to keep shelves stocked with major supply chain disruptions happening globally.
“I could get 200 breakers tomorrow, and they will be gone as soon as they arrive,” Nishida said.
Just about every sector of the construction industry is feeling the disruption on Kaua‘i.
“Everything (is delayed), from cabinets to windows and just all kinds of random things that you would never think of,” Tyler Rodighiero, co-owner of Pac Build said in a recent interview. “Appliances are 12 months out. When I start a house, I have to order the appliances first thing, which is not normal at all.”
Even the most basic materials are sometimes hard to find.
“It could be something as simple as screws and nails,” said Jason Berry, owner of ProBuilt Hawai‘i Roofing and Rain Gutters. “Just the other day, we were trying to get some copper nails and our supplier was out.”
Material shortages are causing some delays in construction, but suppliers and contractors are adjusting, with some financial costs.
ProBuilt Hawai‘i Roofing and Rain Gutters transitioned one of their staff members to work as a purchasing agent 30 hours each week. They have also been ordering supplies in bulk and increased warehouse size to make sure commonly used materials are there when they need them.
Other companies are making similar adjustments to secure and store material. Alpha Electric is also being mindful about how they fulfill orders.
“The biggest issue that we saw about three months ago was mainland contractors coming in, thinking that they can get material in two days like they can on the mainland. They were trying to wipe out our shelves,” said Nishida. “I had to make them special order (materials) just so my local contractors could keep working.”
Delays in construction can have big consequences. One contractor, who asked not to be named, is facing major legal costs after entering mediation with a client over project delays due to supply chain shortages, according to the contractor.
“Some people are understanding, some are just in their own space of mind,” said the contractor.
Instable pricing due to inflation and supply chain disruptions is another added cost for construction.
“There have been substantial price increases in copper goods and aluminum for the rain gutters, as well as in the asphalt shingles,” Berry said. “So, we just have to work hard to buy in bulk, so that we can get a better price.”
Currently, ProBuilt Hawai‘i Roofing and Rain Gutters guarantee bids for just a week. When prices were more stable, they guaranteed bids for 30 days. Even so, sometimes price increases between the time a bid goes in and when ordering the product for the job.
“We have just had to absorb those costs because once we have a signed contract with a customer, we honor the contract,” Berry said.
For suppliers, pricing fluctuations due to catastrophic events all over the world are a constant concern.
“Some manufacturers have declared force majeure, which means pricing is day-to-day,” Nishida said. “Hurricanes down in Louisiana damaged two out of the four major resin factories. Last year, we had the fires up where the PVC is manufactured and that slowed everything down. But we keep on going.”
According to Nishida, Alpha Electric is cutting margins on some products to keep them affordable.
“We’re taking a hit, but we just want to be here and try and weather the storm,” Nishida said.
But not all contractors are feeling the impact of supply chain shortages.
Solar Kauai puts in orders for some types of batteries a few weeks earlier than was typical in pre-pandemic times, but have not had trouble securing necessary materials in a timely manner for solar installs. Manager Elliot Lucas attributes that to the relatively few materials necessary for a solar install compared to constructing a house.
With supplies in stock, the small family-owned and operated business has benefited from the pandemic surge in consumer spending.
“To be honest, I mean, during COVID times, we probably had the busiest two years we’ve ever had,” Lucas said.
•••
Laurel Smith, staff writer can be reached at 245-0424 or lsmith@thegardenisland.com.
