Prices of construction materials rose sharply nationwide, and Idaho contractors and suppliers say they are seeing the same trend in certain areas.

“Some (products) related to crude oil prices, like roofing and resin products like PVC, are up,” said Peter Alexander, CEO of BMC, a building materials company in Boise. “Also, lumber prices from the Canadian mills are heading up as capacity has been managed down and demand is up from countries like China, Korea and Japan.”

The nationwide price index for construction materials — a weighted average of all materials used in construction plus items consumed by contractors, such as diesel fuel and tires on equipment — rose 0.9 percent in February, more than double the 0.4 percent rise in January, according to the Associated General Contractors of America.

In Idaho, 67 percent of contractors told the association that they expect prices on key materials to increase by up to 10 percent this year, and 26 percent predicted increases of 11 percent to 25 percent.

“Drywall prices are going to increase about 30 to 35 percent,” said Chuck Miller, owner of Chuck Miller Construction in Hidden Springs. “Lumber is still relatively inexpensive. Steel continues to fluctuate but climb a bit higher.”

The higher prices are the result of changing supply and demand, he says.

“As demand has fallen off, manufacturers have reduced their production significantly, and they’re not carrying inventories,” Miller said.

“You used to be able to just call, and they’d take off the shelf what you wanted and ship it. Now it has to go into the production queue. They shut down mills or manufacturing operations so they could control costs. Now that you’re starting to see demand creep up, it hasn’t reached a point where it makes sense for them to open mills or add shifts. So you’re starting to see prices begin to rise.”

Scott Flynn, owner of Flynner Homes, a certified green building company that builds up to 10 custom homes a year in the Boise area, said he believes the cause of rising prices is inflation.

“It’s because the creation of money by the government creates inflation,” he said.
Flynn said the advanced framing techniques he uses cuts down the amount of lumber in his homes compared with traditional builders.

“Any increases of pricing are felt, but compared to any other home being built, we’re beating that by 20 percent,” he said.

Alexander said higher prices could help stall the recovery, depending on the extent of the increases.

“That said, BMC’s sales year over year for the month of February were up almost 30 percent,” he said.

Read more here: http://www.idahostatesman.com/2012/03/20/2042885/construction-costs-rise.html#storylink=cpy

Source: Idaho Statement

Posted and edited by Riona, Hanbao News Department

Contact: rionach@cltimber.com