Skyrocketing Costs of Construction Materials Hits Both Consumers and Contractors
(PHOTO ABOVE: Jeremy Dolby of Dolby Customs. Photo by Dave Cyphert of ProPoint Media Photography.)
Depending on the type of supply needed, contractors estimate the increase could range between 40 and 100 percent, with some customers putting off a project because of the higher prices. Despite the increases, work continues for contractors in the tri-county area.
When COVID-19 first struck, there were problems with a slowed-down supply chain, but there is now an adequate supply in stores, and the prices have increased dramatically.
Ron Gustafson, of Gustafson General Contracting, in Oil City, said there is a lot of activity that started before the rise in prices. Big projects in downtown Oil City that started before the increase in prices are mainly county- and state-funded projects based on transportation.
“I’ve been working out of here for about 35 years and what I’m hearing is that production slowed down on materials during the start of Covid and have remained up and down,” said Gustafson.
“I suppose some issues are out there, but sometimes, you know, suppliers are of the mind that they don’t want to let a good crisis go to waste when they are able to pump up prices.”
The prices for wood products, especially plywood are at ridiculous levels, according to Gustafson.
Clarion County contractor Jeremy Dolby, of Dolby Customs, agrees.
“We do everything and anything, and we’re not just like a framing contractor. We do everything from the ground up, so we’re all over the place,” said Dolby who has a three-member crew.
“I would say on average, you’re looking at probably at least a 40 percent increase for sheet goods. I used to buy half-inch sheet of OSB for $9.00 a sheet, and now it’s $37.00 and change before tax right now.”
According to a published article in Builder Insights, building codes consider OSB (Oriented Strand Board) and plywood interchangeable and refer to both as “structural wood panels” as both OSB and plywood panels are created when the wood is glued and compressed to form a rigid panel. Despite the obvious similarities, there are some essential differences. From a structural standpoint, plywood and OSB panels are considered equitable, although their different manufacturing techniques give each board its advantages and disadvantages.
Gustafson estimated the sheeting increases at 100 percent.
“Sheeting is really common in building, receding wall sheeting, and so forth. It used to be an economical product. I think even 16th inch, which is a very common OSB, maybe a year ago was running $18.00 a sheet, and it’s now $37.00 to $40.00, depending on where you’re at.”
It’s also looking like home repairs may be a good investment.
U.S. home prices have soared, according to a published article in Goldman Sachs, rising at their fastest rate since 2006 as low-interest rates and supply constraints fueled a housing boom. Sachs thinks the rally has much further to go and upgraded its 2021 house-price appreciation forecast to 6.8 percent from 4.7 percent.
In Jefferson County, contractor Cory Holben, of Holben’s Construction and Remodeling, out of Brookville, is advising his customers to move ahead with projects while the goods are available.
“The cost of material has gone up, but a lot of customers don’t realize that,” said Holben. “By the time we get an estimate done, they’re like – ‘Wow, that’s a lot of money!’ Sometimes, it is because everything’s going up, and it’s just not what — it’s everything. You can lose a lot of jobs because people don’t want to pay that much money. They want to wait it out and wait until it goes down.”
Holben also feels the pandemic has also influenced people about home remodeling projects.
“I think everybody from this pandemic has or is sitting at home, and they’re bored,” said Holben. “They’re just like – ‘Well, let’s upgrade this or let’s do this,’ and they like to spend money. I’ve seen more work in the last year than I’ve seen in a while because of the pandemic. I honestly feel there’s a lot of people that are sitting at home, and they’re thinking why don’t we just remodel our bathroom?
“There are still people out there that didn’t get affected by the pandemic, but they hear that all of their other friends getting stuff done. So, then they went and get stuff done. So, I mean, it’s just a circle. It just keeps going around and around.”
Holben has been in business for five years and really can’t complain about the amount of business. He is down to just himself working, but he does like the challenges and is able to navigate the supply challenges.
“Boards are expensive, but I have multiple suppliers. I don’t pick just one and bounce between a bunch because everybody has different prices.”
As the name implies, Dolby Customs works on more specialty projects.
“We’ll do cookie-cutter, but I think now we’re kind of known for the more unique, anything from historical restoration to ‘I’ve got this idea and I can’t find anybody who’s willing to make it work – can you come and take a look’,” said Jeremy Dolby.
Dolby said the rising cost has had a minimal impact on his business, and he found that surprising.
“I expected to lose more than we have so far. Most of my clients are still willing to proceed, and we do what we can to cut costs,” Dolby added.
Based in Lucinda, Dolby Customs now includes two employees plus Jeremy.
“I’d like to be back to a four-man crew, but it’s kind of difficult to find anybody worth their weight right now. I don’t mind teaching some guys, but it’s hard to find somebody who’s actually got the motivation to learn. I think if we’re going to bring a fourth guy back in, it’s got to be somebody with some experience.”
Along with increasing prices, finding qualified workers is another problem facing all businesses.
Ron Gustafson has worked on some larger projects in Oil City but is also down in the number of his staff.
“I usually have five employees, but right now I’m working with three,” said Ron, who is also a third-term Oil City Council member. “I’m just finishing up some projects, but I’m getting a little close to retirement and not looking to expand. I’m not sure how, how much I want to participate in this material market.”
Gustafson said his company was shut down for a couple of weeks last spring, but business has been steady since then, and all of the contractors that he’s familiar with are really booked up.
“I don’t think that it has really hurt demand yet, but in a couple of instances, I’ve seen where people have become hesitant to invest the money in the extra material costs, thinking and hoping that it’ll come back down.”
Regardless of the skyrocketing increases in construction supplies, it appears that contractors in the tri-county area have more than enough projects to keep them busy.
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