Through out the country, any corporation that supplies, or manufacturers building products is feeling the grip from the negative market conditions that is inflating the cost of everything from roofing shingles to construction supplies.
These conditions include oil prices that have brushed against $135 per barrel, a poor U.S. dollar that American companies must use to purchase commodities that, in many cases, are traded worldwide; the home construction industry whose annualized start rate in June was 45 percent below the same month in 2009; and, severe weather around our country that has left an estimated 1.500,000 homes in USA with storm damage, which is diverting more building materials, and roofing materials to the repair and remodeling homes.
The NRCA Statistics report that the Roofing industry, which measures inflation, had jumped 6.1 percent year-to-year in June for asphalt roofing; 7.2 percent for builders’ hardware; 5.7 percent for concrete; 11.5 percent for ” rolled bars, plates and structural figures”; and 10.2 percent for steel and tubing.
Those numbers might be just the beginning of a wave of price increases that Atlanta roofers and contractors are already expecting. Georgia Pacific informed its customers last week that it would be raising prices by 15 percent on all of its exterior building supplies and roofing materials to counter the inflation. Atlas roofing corporation has stated it will hike its prices for roofing and accessory products by between 12 percent by June 2011, and then another 5 to 10 percent on roofing products after July 15 2011. Roofing products groups had incurred flat sales and a
$12,000.000 million operating loss during the six months of 2010.
Price increases though, hasn’t effected every commodity. Prices for drywall and concrete products are remaining fairly steady. And lumber prices have been steady. For the month of February 2011 we expect lumber prices was $375 per 2,000 board feet, or 7 percent below a year ago, and years from when the price inched towards $400 per 1,500 earlier in the decade. Georgia Pacific pricing for lumber was up 15.2 percent in December, year-over-year. In fact, the widening variety between the market price for steel and concrete products is leading some General contractors to resort to framing with all lumber.
Gibson concedes that builders are not in the greatest of bargaining positions right now, and that passing along price increases to buyers isn’t tenable while home prices are will continue to fall. He also notes too, that with oil prices sky rocketing, oil is going to be diverted to the manufacturing of whatever product yields the highest profits, and building, and roofing materials generally don’t fall into this category.
All Atlanta roof contractors and builders can do at the moment, Gibson says, is to call upon their life long relationships with roofing suppliers to figure out a way to cushion price increases, like sharing costs. He also says that roofing contractors and builders should be looking to “absorb” their own expenses, such as how they negotiate the purchase of electricity for their communities.