4 Causes Contributing to Current Material Costs

Right now, we have projects coming in like never before, even with current lumber prices!

At this time, it is very difficult for us to provide anything other than a ballpark estimate for large projects, especially due to the fact we are currently scheduling 12 to 15 weeks out for larger custom projects.

Our suggestion is to get a price now so you can start budgeting, but we cannot lock in price contracts for work later this summer at this point.

We always strive to have the best quality at a fair price, therefore we cannot hold our prices for more than 7 days. Also, with the number of leads coming in, we are a little behind in turning out our estimates. Please be patient, and if you’re just looking for standard pricing, you can go on our website for standard pole building prices. We strive to update every two weeks, but you can call the office to confirm it.

****Please have a desired budget and time frame for your project when you call in for an estimate!****

Market situation

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As we enter the second quarter of 2021, the price of metal and lumber continues to rise, with no signs of stopping. Domestic steel prices are up more than 160% since last August,’ and lumber prices have increased around 200% from a year ago. Steel mill product prices increased by 17.6% in March. We are quoting steel five to six months ahead and the prices are still rising.

Reuters reports, “Unfilled orders for steel in the last quarter were at the highest level in five years, while Inventories were near a 3-1/2-year low, according to data from the Census Bureau. The benchmark price for hot-rolled steel hit $1,176/ton this month, its highest level in at least 13 years.

What is causing the price increases?

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A number of factors converged to bring about the pricing surge, and most of these factors are continuing to go unresolved:

  1. Forced shutdowns: The government-imposed lockdowns last spring caused many mills to temporarily close, which limited the supply of raw materials.
  2. Labor challenges: According to the executive director of the Louisiana Forestry Association, many lumber mill workers found new jobs during the shutdown, making it difficult for mills to fill positions when they reopened. Steel mills and lumber mills alike still face constraints on their production due to social distancing requirements and other mitigation efforts.
  3. DIY boom: With Americans spending more time at home, many are taking the opportunity to tackle do-it-yourself (DIY) projects, which creates a surge in demand at the same time that supply is limited. 41% of U.S. homeowners say they have done a home project in the last year.
  4. Real estate boom: Low-interest rates continue to spur home sales, but a tight housing supply is causing a rush to new construction, which in turn contributes to the demand for raw materials. The demand for new homes is so high that even during this time of economic uncertainty, the U.S. saw a 14-year high in new housing in March. 
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However the low interest rates make everything possible for the consumer, and there is no reason people should stop building as property value continues to rise & dollar value will continue to decrease over time.

The first step is a phone consultation.
If needed, we will meet with you in person as well!

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