As we pass the midpoint of May, some numbers from the first quarter of 2022 are coming in and they give some context to our supply chain issues.
Concrete production nationally was up about eight percent from 2021 in the first two months of 2022. That's good news for construction and for concrete producers even though the numbers from January and February are often impacted by weather more so than the rest of the year.
Related to this - and also quite positive - are the numbers for residential permits from the first quarter of 2022 (from our friends at Market Graphics). For the major markets in Tennessee, permits are up about 6.6% over the same quarter in 2021. The only market in Tennessee that saw a decrease from the 2021 first quarter numbers was Memphis, where permits were down a little over 9%. Chattanooga was up 24.8% over 2021, and Montgomery County also saw a double digit jump with a 13.8% increase over 2021. The Nashville market was up 5.8% and in both 2021 and 2022 the number of permits in Nashville (4509 and 4770, respectively) exceeded the number of permits for all the other major markets in the state combined for the same period.
The strong start for 2022 aligns with one of the causes of concrete supply issues - increasing demand for concrete requires more raw materials, like Portland cement, to produce it. In my recent conversations, the cement supply issue is now spreading well beyond the Southeast with several states north of Tennessee now beginning to experience similar issues.
The situation in Tennessee seems to have stabilized in the past two weeks, but we are still walking a tightrope in terms of available supply, demand and weather. The consensus opinion is for this situation to continue through the summer of 2022 with relief in sight for the Fall of 2022 with some new production capacity coming online for the Southeast, and perhaps a slight slowdown in building activity as we go deeper into 2022.
For middle Tennessee, we are not yet seeing any impacts from the lock closures (for scheduled maintenance) on the Cumberland River but these closures are just now beginning. What impact they may have should become more clear in the next few weeks.
Communication between contractors and their suppliers continues to be vital to all of us as we navigate the rest of the 2022 construction season. Ready mix producers are facing supply issues that literally change on a daily basis based on factors that are beyond their ability to control or influence. Contractors are subject to these same factors so working together with respect and patience provides the best path forward for all of us.
Workforce remains a constraint for everyone in the construction industry and this is also likely to persist into the future. TCA will be kicking off our workforce campaign on behalf of the concrete industry in June, and we are providing a program to help individual members better utilize social media in their own hiring efforts. There are great opportunities for fulfilling careers in our industry and we need to do a better job telling that important story!