High demand, low supply for building materials
What a world we are living in—the past 18 months feel like they have flown by. Looking back, it still feels like a bad joke when I think about how there was a time when toilet paper and flour was so popular that stores couldn’t keep up with the demand. While we have moved past having to use leaves in the bathroom as a last resort, we are still seeing demands spike for products while supply remains low. That is just a bit problematic to say the least.
In the trades, there has been shortages for an array of products including lumber and plastic piping. The cost to purchase material for a job gave quite a few contractors headaches—again we start to see people stockpiling material to ensure that they will be able to complete the job as promised.
For the steel piping industry, there was an increase in the price of material by around 250 per cent; again, this was largely due to high demand and little stock.
The pandemic wasn’t the only culprit for lack of building materials within the industry. Snowstorms in Texas led to shortages for the plastic piping sector across the country.
With little amount of supply for several parts of the industry, and increased demand in building materials, the industry posted historic highs for how much it would cost users to purchase building materials. It is only now that we are starting to see a decrease in the costs. This is expected to remain for at least several more months, reports Tom Murray, vice president and general manager for Flocor.
Contractors were forced to change their approach for getting the required building material. For Jeremy Flamand, partner at Peak Mechanical Partnership, buying materials as soon as the job goes through is the new practice—especially since pricing for material rarely lowers during a job.
A not so new practice, but just as important, is building a strong relationship with the local wholesalers, suggests Ron Coleman, owner of Coleman Management Services. By making yourself a preferred customer, you’re going to receive the materials you need, otherwise you might get left out in the cold, explains Coleman.
How has your company changed the way they buy building material? Let us know!