There’s no doubt about it. The last few years have ushered in a lot of change, and few industries have been affected more than IAQ. As a result, the world quickly changed for engineers, contractors, and facility managers concerned with indoor air quality. Sometimes, it’s hard to keep up. That’s why Robert Miller, president of Coward Environmental Systems, Inc. (CESI), recently shared his perspective on what has changed. He talked about five macro-trends that will continue to impact all parts of the commercial air quality industry in the next few years.
The Changing Role of IAQ
“In our industry,” Miller explains, “there has always been a very conscientious drive towards better indoor air quality. It’s what we do, and it’s what we care about. But we also look at everything differently than other types of organizations, and I think our viewpoint is a bit more global.
“For example,” he continues, “COVID has pushed the industry towards bringing in more outdoor air. Now that initiative is being questioned. After all, there are many reasons not to bring in more outdoor air. The cost of conditioning that air comes to mind. And what if the outdoor air isn’t cleaner than treated air? As we move forward, engineers and contractors will continue to push for solutions based on analytics and careful evaluation.”
“Cleaning air, monitoring air flow, fans, humidity control, and filtration will continue to be very important for tech, healthcare, and many types of manufacturing,” says Miller. “We’ve never been better positioned to consistently deliver pristine air that meets the most demanding environmental requirements.”
Demand Results in Inflation
Material costs have risen dramatically, inflating prices throughout the supply chain. Miller notes, “Rising material costs have drastically impacted equipment cost. Our equipment may be 20-20 percent higher than just 24 months ago.”
Demand is up, and even if raw material prices stabilize, inflation may continue to be a factor. “All the money that’s been put into the economy is creating extraordinary demand,” says Miller. “Econ 101 tells us that when demand is up, supply pushes pricing up. So until the demand settles down, prices will remain high.”
Labor Shortages Drive up Lead Times
The workforce was tight before the pandemic. But the perfect storm of early retirements, more one-parent households, more people demanding work-from-home jobs, and more employers offering higher salaries and signing bonuses has made it more complicated than ever to find employees and to get them to stay in a job. “Labor costs have gone up in the factories and job sites,” Miller notes. “And when labor costs increase, project and equipment costs push up.”
Miller explains that many manufacturers are not staffing up to meet demand. “A tight labor market will keep pricing high,” he says, “but manufacturers can’t or won’t want to hire to meet the need. In fact, most manufacturers believe we are experiencing a bubble of demand. So it doesn’t make sense for them to expand to meet short-term demand blips.”
Longer Lead Times Require Good Partners
Because manufacturers are not staffing up to meet demand, they are pushing out lead times. Miller explains, “Lead times will continue to be extensive. OEM equipment already had long lead times – 20 weeks or longer – before all this happened. Many manufacturers are now advising us to plan for a 52-week lead time.”
Coward Environmental Systems works hard to mitigate the effects of long lead times. “A lot of our OEMs offer off-site builds and modular construction,” says Miller. “This approach can ease regional labor pinches and generally soften the blow of labor shortages. It’s an especially effective way to minimize the effect of skill shortages.”
“Good partnerships are also important. Because we get involved with projects so early,” he continues, “we can buy early in the process. It’s one way CESI can play a part in improving the project. In addition, early buys mitigate the effect of long lead items and help protect the project’s schedule.”
Microchips and Circuit Board Shortages Slow Down OEMs
Issues around microchips and circuit boards have also impacted lead times. “Anything with a chip in it,” Miller emphasizes, “comes with extended lead times. Everything from controllers to OEM motors to VFDs. They’re having difficulty sourcing the chips effectively, so those lead times have been extended.
Over the Road Logistical Challenges
“Logistics have also been slowed by a diminishing number of over-the-road truckers,” he notes. “There are a lot of professional drivers who joined companies like Amazon and UPS for short-haul work. These places have plenty of openings. They pay good wages, and truckers don’t have to be on the road all week. But, as a result of this shift, over-the-road trucking firms can’t staff up, so getting enough trucks in and out of the ports is now a problem.”
Relief in 2025?
Miller emphasizes that various influences create shortages, drive up prices, and create longer lead times. “I haven’t even mentioned geopolitical factors such as the war in Ukraine and trade issues with China,” he adds. “In my opinion, the indicators seem to point to significant supply chain issues for at least another 24 months. Material costs will continue to be volatile. Maybe we’ll start to see a turnaround in 2025.”
In the meantime, Coward Environmental encourages engineers and contractors to bring CESI into the process early. CESI can suggest labor-saving solutions and buy early to help reduce downtime or construction delays. Contact us today to learn more about Coward Environmental and how CESI can help your firm work through challenges.