Gypsum Leads Price Hike
At 14%, gypsum products rose the most in the past year. Lumber and plywood posted the second highest hike at 9%. Prepared asphalt and tar roofing climbed 5.4%. Lumber prices are expected to outpace all rising costs, as new federal regulations force an industry slowdown. Insulation materials, construction machinery and equipment, and asphalt paving and blocks also saw prices rise over the last 12 months.
Lower costs for diesel fuel and steel, aluminum, copper and brass products are helping to offset increases, to a degree. The weighted average for all construction material costs was up 1.4% over the last year.
Global Construction Affects Material Costs
China’s rapidly growing construction industry has slowed. Emerging markets like India, Russia, and South America are keeping demand and prices strong. Europe, on the other hand, may fall back into a recession in the next year. If this happens, the resulting decline in construction could drive the cost of steel down further. Its impact on lumber prices remains to be seen.
What This Means for the Construction Industry
Builders have done their best to keep overall material costs level. Many have balanced higher lumber costs with lower or declining cost materials such as steel. Some construction firms can no longer absorb these rising costs and may be forced to close their doors. For them, and for everyone fighting rising material costs, here are some ways to save on projects:
- Use existing materials. This can work well with air conditioners or plumbing.
- Buy local or within the U.S. Buying overseas can increase shipping time and keep your workers on the job longer.
- Lock in prices early to get the best deals.
As costs rise, builders will need to find new ways to cut back on operating expenses or see their bottom line fall into the red. Projects still on the drawing board will take the hardest hit.
Are you feeling the pinch? Tell us your story and how you’re dealing with rising material costs in the comments below.