California Wildfires Impact on Supply Chains and Construction Timelines

January 20, 2025

Headshot of Glendon Steady

GLENDON STEADY

The recent Southern California wildfires have caused unprecedented devastation, claiming 25 lives, displacing tens of thousands, and inflicting $250-$275 billion in damages, making it the most expensive wildfire in U.S. history. While federal funding will cover 100% of disaster response costs for 180 days, rebuilding efforts face challenges from hazardous fire debris, which contains toxic materials like asbestos and heavy metals. Los Angeles County has prohibited debris removal in critical areas until inspections ensure safety, adding delays to reconstruction timelines.

Below, we’ll explore what’s ahead for businesses involved in construction, supply chain management, and disaster recovery—and how you can prepare to navigate the changing landscape.

How the California Wildfires Will Disrupt Supply Chains

  1. Material Shortages

The surge in reconstruction projects will drive unprecedented demand for building materials such as lumber, concrete, steel, and other essentials. Suppliers, many of whom are still recovering from global disruptions caused by the pandemic, are unlikely to meet this increased demand without delays.

  1. Rising Costs of Materials and Labor

Higher demand for both materials and labor will lead to price spikes. Contractors specializing in hazard mitigation or electrical grid restoration will possibly face rising costs due to hazard pay and worker per diems. This will create a ripple effect, increasing expenses across all reconstruction projects.

  1. Logistical Challenges

Damage to local infrastructure, including roads and utility systems, will hinder the transportation and delivery of materials to affected areas. Delays in material shipments could stretch project timelines even further, forcing developers and contractors to re-evaluate schedules and budgets.

Implications for Construction Timelines

  1. Resource Competition

Rebuilding efforts will prioritize homes, schools, and critical infrastructure, leaving fewer resources and skilled workers available for commercial and non-critical projects. This increased competition will put immense pressure on local contractors and labor markets.

  1. Delayed Project Schedules

Extended lead times for securing materials and labor, coupled with logistical challenges, will push project schedules out further. Contractors may also face permitting and inspection delays as local governments grapple with processing an overwhelming volume of projects.

  1.  Required Assessments in LA County

Los Angeles County Health Officer Dr. Muntu Davis has prohibited the cleanup or removal of fire debris in critical fire areas, including Pacific Palisades and Altadena, until a thorough hazardous materials inspection has been completed. Fire debris—contaminated with asbestos, heavy metals, and other toxic substances—poses serious risks to public health if mishandled. These inspections, which are part of a two-phase cleanup process, add a critical layer to recovery efforts, ensuring safety but also extending timelines for reconstruction.

Recommendations for Businesses

To successfully navigate the challenges posed by the Southern California wildfires, businesses need to adopt proactive strategies and prepare for evolving conditions.

  1. Start Early

Begin project planning and bidding processes as soon as possible to secure essential resources. Early preparation will help you lock in materials and labor before prices increase.

  1. Diversify Supplier Relationships

Establishing partnerships with multiple suppliers can help mitigate risks associated with material shortages or delays. Diversifying your supply chain network is critical in a highly competitive market.

  1. Plan for Higher Costs

Account for rising material and labor costs by building contingency funds into your project budgets. Factoring in cost increases early will help you avoid financial surprises down the line.

  1. Stay Informed

Monitor FEMA announcements, material market trends, and updates on recovery efforts. Staying informed will allow you to adjust your strategies and timelines as needed.

How Moran Consultants Can Help

At Moran Consultants, we recognize the unique challenges presented by disasters like the Southern California wildfires. Our comprehensive Due Diligence services are tailored to thoroughly assess the full scope of damage, including the evaluation of building rehabilitation needs, environmental risks, structural integrity, and potential contamination. By providing a detailed, data-driven analysis, we help ensure that you have the information needed to make informed decisions and navigate the recovery process with confidence. Whether your property requires targeted repairs, extensive renovations, or a complete rebuild, we guide you every step of the way to develop a clear and actionable recovery strategy.

Our Construction Loan Monitoring division plays a critical role in overseeing the entire reconstruction process. From budgeting and financial monitoring to ensuring compliance with timelines, we help navigate challenges such as supply chain disruptions and construction delays. Our proactive oversight helps mitigate risks and keeps your project on track to deliver results efficiently and cost-effectively.

In addition, through our Owner’s Representation services, we act as a trusted partner, advocating on your behalf throughout the recovery process. We offer strategic guidance, coordinate between stakeholders, and ensure your project aligns with financial, regulatory, and safety standards, giving you confidence and control over the rebuilding efforts.

 

Headshot of Glendon Steady

GLENDON STEADY