Supply Chain Problems Affect AAC, Too

25 May 2022: In the US, demand for AAC is exceeding supply. Aercon (Florida) recently re-opened after a major factory renovation and is already experiencing 3 months from order to delivery (OTD). The only other manufacturers serving the US market are in Mexico. At least one of these is projecting a 2 week OTD, depending on border and shipping delays. Many areas of the US would see delivery costs from Mexico near 50% of the AAC product they are delivering.

The current US housing market is at historic highs and is up nearly 20% Year-over-year (YoY). The Great Recession of 2008, expedited by a US housing "bubble" (i.e., an unsustainable increase in prices) is recent memory and this has some pundits predicting everything from the bubble is about to pop (Wolf Richter). DallasFed.Org is more cautiously stating that a bubble may be forming. Others point to numerous fundamentals, such as missing housing stock, as reasons current home prices are likely to continue to increase or remain steady for years to come (Forbes).

Buildings are complex, expensive, illiquid assets with multiple supply-chain inputs. Changes in the builder's financing rates or in demand for housing can change dramatically from the time a house is planned to the time keys are handed to the homeowner. Builders are especially sensitive to delays.

When used, AAC is a major component of any building and not something a builder can just work around until later. This presents a "chicken-or-egg" situation in that builders assume significant risk using a product without a stable supply, but AAC factories aren't built until builders provide significant demand.

Is this the most significant reason for AAC's inability to penetrate the US housing market after decades of trying? AAC manufacturing in the US is nearly non-existent both when lumber spikes higher than AAC and wildfire season becomes year-round, and also when lumber is cheap and AAC is only 10% higher. Will it take a sustained inability to obtain lumber at any price, or draconian energy efficiency standards? Time will tell.

The first step to learning about AAC...

...is to be willing to take a risk on something new. For me, I take risks for the sake of perfection. As a recovering perfectionist, I get on people's nerves sometimes. But I'm old enough to have learned (more than once) that perfect is the enemy of the good. And the done. I can't maintain my incessant optimism if it requires perfection that never comes, but it's my optimism that propels me toward the best. We spend so much time inside a building, I really think we should ask if we're in the best possible building.

Risky travels

This is me when I was much younger and starting a family. Before home computers and before a public internet, I had a feeling life in 2010 might be crazy. I wouldn't have been able to tell you what that would look like, but if you'd have shown me 2020 through now, I would've said, "yeah, like that." Only missed it by 10 years. Or maybe it was just the nesting instinct, but I had an intense desire for a good house for my young family. I began taking construction classes and studying building science. I became a fervent proponent of pier-and-beam in an ocean of slab. I bought the piece of land in that photo with plans to build my own house. And I heard about this thing called AAC.

I became a convert. An ideologue. I visited a site that needed no air conditioning to be comfortable, in Houston. In August. I had to make my house out of AAC. But the only source was in Monterrey, Mexico. To see if I could import it, I called. They invited me to visit. So I bought a $15 bus ticket (i.e., the kind of bus where only I spoke English) and off to Monterrey I went. Without a clue where I would spend the night or proper papers, only a limited grasp of the language, and arriving in the full-throttle party that is downtown Monterrey at 2 a.m. God looks after fools like me. It was a great trip.

Flash forward 30 years

Life takes us places we don't expect. I never built that house. My children became beautiful adults that I couldn't be more proud of. 2010 came and went. I was able to travel the world - several times. I got old and started thinking of what I could do next. Dreams that never had been realized. Dreams for houses that are easier to build, live in, and care for. And so here we are. Risking a life's worth of savings. And learning so much - good and bad - about AAC. Why should all these hard-knock lessons not be shared? So the first step to building with AAC is to... create a website??