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A global problem has myriad local effects on everything from construction projects to community events.

PMG FILE PHOTO - Construction projects at both the city and school district level have been impacted by supply chain issues. Here, workers are seen at the site of the now-completed new Lakeridge Middle School. Editor's note: This is the second and final part of our series on how the global supply chain slowdown has trickled down to local communities like Lake Oswego. Part one can be found here.

If you're shaking your fist at a local construction project that's causing a traffic delay, and wondering why the work has continued past its expected completion date, your first inclination might be to blame the workers or the jurisdiction in charge of the project.

In many cases of late, your ire should instead be focused on the global shipping meltdown that has caused a variety of issues not only for local businesses, but also cities, school districts and homebuilders.

Public sector, utility impacts

Local cities have experienced minor impacts from this phenomenon. For instance, the city of Lake Oswego has encountered a couple situations where they couldn't receive the correct piping needed for a stormwater project.

"We were able to accommodate that delay, but that's the only one I know of where we've had a request for delay during construction so far," said Erica Rooney, Lake Oswego's public works director and city engineer.

Rooney said there was a moment when the city thought it couldn't retrieve Christmas lights for the annual holiday tree lighting event.

"Supplies were nowhere to be found," Rooney said. "Then the shipments came in and we did a rush to get them, because we do replace those (lights) every year."

Another problem area has been street lighting. Rooney said the city purchased replacement bulbs back in March. It was supposed to take 10-12 weeks but at that time, the supplier said it would be another 20 weeks. So the city in turn decided to switch to a different kind of bulb that's more readily available.

"We've had a lot of street light outage issues that haven't been resolved," said Rooney, adding that this issue has resulted from the city being unable to obtain the physical product. "There's not a strong pattern other than just saying we're seeing and hearing that more and more."

But more often than that, Rooney has seen the effect of COVID-19 on contractors themselves. She's noticed contractors and subcontractors out sick, and sometimes it even hits the entire team of workers.

"They have had more personnel resource challenges than anything else — that's been affecting projects more than, per se, the supply chain directly," Rooney said. "That ebbs and flows."

The Lake Oswego School District has experienced an array of supply delays and shortages on items ranging from steel to basketball hoops, according to Anthony Vandenberg, executive director of project management.

The district sources material from a multitude of suppliers and manufacturers, and who they order from can "change daily," said Vandenberg. But manufacturer shutdowns and worker shortages are just two pieces of a complex puzzle.

This academic year, the installation of Oak Creek Elementary's new playground forced the district to get creative. The goal was to build the playground over the summer, but the district received most of the equipment from overseas suppliers in late September.

Now, as students are back, contractors have to close off portions of the playground while school is in session. And the team is working in wet, muddy conditions, which raises another set of issues as parts of the play surfaces require a temperature of at least 45 degrees when installed. Other pieces of equipment need dry weather, according to Vandenberg.

"A whole bunch of challenges, and they've been installing equipment as it arrives in small areas. They'll close off in a hurry and then move to the next," said Vandenberg. "We've adapted, but it's just certainly a long, long process."

However, Vandenberg said his team has dodged many delays by "getting way ahead of the market." Earlier this spring, the district's contracting team ordered steel a couple of months ahead of when they usually would.

A delay still occurred.

"Steel was a close call for us this past summer. We were just sitting there waiting for it to show up. Even though we ordered so much, so early in the process, (the shortage) still hit us," said Vandenberg.

Portland General Electric, meanwhile, started a task force to monitor supply issues and stocked up on transformers to make sure they wouldn't run out.

"Through 2022, we have got a reserve of transformers on hand to make sure we can respond to any unplanned outages. We're not forecasting any shortages that would impact ability to supply customer-planned projects," said Andrea Platt, a spokesperson for PGE.

Home construction impacted

Anything that isn't made in the United States has been hard to come by lately, according to OrePac Building Products President Brad Hart. OrePac distributes construction materials for components like siding, doors and decks to developers, and Hart said materials arrive months behind previous norms while shipping costs have skyrocketed. But even domestic suppliers are constrained, he said, because they're not used to meeting such strong demand.

"We could be selling a lot more products," he said. "It's slowed the whole housing world down."

Hart added that the company buys materials from companies in places such as Chile, Brazil, China and Indonesia.

"Our ports are so choked — even those countries like Chile are wanting to sell products elsewhere, wanting to keep them moving and get going," Hart said.

Developers, meanwhile, have at times had to delay move-in dates or install temporary appliances when they can't get products on time. If components like heat pumps or electrical boxes are scarce, local jurisdictions are forced to be more flexible about mandated timelines according to Ryan Makinster, director of policy and government affairs for the Home Builders Association of Metropolitan Portland.

"Our membership is having to work with local jurisdictions and building inspectors to make sure they can move along the building pipeline or process with the understanding they might not have everything they have to (have in order to) complete the inspection," he said.

Complicating matters further, Skip O'Neill, a Lake Oswego contractor, said there's been an increase in remodeling and building new homes during the pandemic.

"The supply chain issues started about the end of July and they have just gradually gotten worse," O'Neill said.

O'Neill recalled a wallpaper hanger notifying him they couldn't obtain wallpaper paste because there were no buckets available. He also saw painters having issues receiving paint and remembered when a person could walk in and paint stores would have the paint available the same day. Now, he says a commercial painter could wait up to two or three weeks to receive paint. O'Neill added that timelines to receive plumbing or lighting items — anything made offshore — have increased roughly threefold. Timelines for items made in U.S. factories, like windows and doors, have gone from a waiting period of six to eight weeks to 22-30 weeks, he said.

"If you're a smart builder, you kind of push the project out so you know you have all those items in, and then you start the project," O'Neill said.

Curtis Huson, the vice president of land acquisition and development for the developer Taylor Morrison, said garage doors, windows, shower enclosures and countertop materials are among the products frequently delayed. And he said that manufacturers will sometimes cancel a quote provided and raise the price due to the leverage they have. Home closing delays, he said, are about one month on average.

"When we have supply chain delays, sometimes we do have to push out closings," he said. "To mitigate that we're trying to source additional materials or alternate materials to keep things on track and expand vendor partners to get us a better chance of getting that availability (of items) oftentimes at a premium expense to us in an effort to keep the project on track."

As has been reported extensively, home prices rose to new heights earlier this year. However, Huson said that for Taylor Morrison, the extra material and supply chain costs have oftentimes exceeded the increased revenue from home sales.

When will it end?

Daniel Wong, an instructor at Portland State University's Center for Executive and Professional Education, hopes the new year will bring about some normalcy. Following mass consumption during the holidays, there could be a slowdown in demand during the early months of 2022, he said. Plus, the shutdown in China during the Lunar New Year could ease the strain on ports.

"It gives us a pause so there's no container coming in while the Chinese shutdown is taking place. We can work through the congestion in the U.S. a little bit," he said.

According to Josh Lehner with the Oregon Office of Economic Analysis, the supply chain crunch is likely many months from subsiding. But it wasn't getting worse, at least as of October.

"The silver lining today is vendor delivery times are no longer worsening economy wide — they're terrible but not getting worse in recent months — and business investment is strong. Supply chain improvements should be coming, but we're a long way from normal," he wrote.

Another positive takeaway, according to Oregon Trucking Association President Janna Jarvis, is that this unique economic period has provided Americans a greater realization of the importance of the workers who keep the global chain connected.

"In many respects the average Oregonian now has a better sense of appreciation for the value the trucking industry brings to the economy, whereas I think many of them didn't think of that before," Jarvis said.

Since Lake Oswego's construction season is currently ending and many project prices were already locked in place prior to the upward trend on inflation, Rooney expects to see price hikes on paper during the next bidding cycle in spring.

"I think this subject isn't over," Rooney said. "I think it's growing as opposed to, 'Oh, it's calmed down.' It seems to be not exponentially growing, but it's growing."

Rooney added that what happens at a national level eventually trickles down to local communities.

"We're all in this together and we're doing the best we can, but we do need to be patient," Rooney said.


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