Hurricanes, wildfires cause spike in construction costs
Posted September 13, 2017 8:12 p.m. EDT
Raleigh, N.C. — Michael Lazzaro spent the Wednesday on the phone in search of lumber.
"I've got four manufacturers that supply us that are absolutely off the market. They cannot sell because the demand is so high," said Lazzaro, sales manager at Network Distributors Inc. in Raleigh, which distributes construction materials to commercial builders.
Hurricanes Harvey and Irma are to blame, as building supplies have been diverted to help Texas and Florida recover from the recent disasters.
"We have not a piece of plywood, supposedly, in the state of Florida. So, all of the suppliers in the state of Florida have to restock," Lazzaro said.
Because of the limited supply, he estimates plywood prices have gone up from $1.75 to $4 a sheet, which is making construction more expensive.
"In the past 45 days, there has been an increase in lumber prices due to the fires in the Northwest. A couple of the large producers in the Northwest have shut down because of that," said Rex Bost, a custom home builder. "So, just leading into the hurricanes, we had a little bit of spiking in pricing."
Canadian lumber already is more expensive because of U.S. tariffs.
In addition to more expensive materials, Bost said area builders face a tight labor market, which is driving up costs as well.
"The demand on our labor force in the Triangle is at max. We have a labor shortage," he said. "It's the thing builders talk about more than anything else because we are in a bit of a boom right now."
Combined, the labor and materials costs will add about 10 percent to the cost of new Triangle home over the next year, he said.