The Effects of Hurricanes and Tariffs on Remodeling
Hurricane Dorian and others to follow could play a major role in the construction and remodeling industry through the remainder of 2019.
According to “The Guardian Newspaper” the damage from Dorian is set to cost the Bahamas billions of dollars. Last year damages from hurricanes Harvey and Irma cost over $200 billion according to data from Moody’s Investors Service. The massive rebuilding efforts are increasing the demand for materials and labor nationwide.
What does this mean for the future of remodeling prices after the devastating and historic damages from these recent storms? Unfortunately, if you are considering remodeling your home, it will mean higher building material costs.
These recent disasters will produce a ripple effect in construction markets across the country.
A spike in demand for materials and labor in hard-hit areas will put a pinch on resources throughout the region. Material supply chains and labor forces will get diverted to these areas to provide resources for rebuilding the damage. This new demand will increase prices for building supplies like lumber, roofing, siding, windows, doors, sheetrock and many more products.
The Associated General Contractors of America reported in August that seven of ten contractors already had difficulty finding qualified workers. Experts say there could be a shortage in building materials from rebuilding damaged areas. The cost of construction materials already actually rose 0.6 percent in August and 3.7 percent on an annual basis, according to a recent report by Associated Builders and Contractors.
It can take six months to a year for the full rebuilding efforts to kick into high gear. After a big disaster, it takes a little while for insurance and federal relief funds to arrive. But, when they do it fuels construction in those areas for years.
Higher labor demands create labor shortages and increased labor costs. Material shortages also increase material costs and create longer lead times to obtain them. Our company has already gotten notices from vendors siting increased prices due to foreign tariffs being placed on their products. A recent announcement by a manufacturer of shower doors, mirrors, cabinets and accessories indicated there will be a 10% pricing increase coming soon.
What Can You Do?
If you are thinking of a remodeling project, now is the best time to purchase materials if you are a do-it-yourselfer. If your hiring a contractor, get an estimate and lock in price with him or her before costs rise. It’s not a question of if they will increase, but when and by how much. Prices are the lowest they will be right now.