Feeling some sticker shock when you look at projected roofing budgets?
We understand. Perhaps everyone in construction and real estate does.
According to the American Builder’s Association, construction materials prices are up 25% on a year-over-year basis - including a 2.8% increase from February to March of 2022 alone. According to our data, single ply roof assemblies have shown an year-over-year increase closer to 40%.
Why this is (still) happening?
In short, supply and demand. Demand for construction materials is at all time highs. Demand became more concentrated due to 2020 COVID delays and disruptions.
Meanwhile, supply has been hit hard at every level of the supply chain. While manufacturing is on the road to recovery, it will take some time to catch up to backlogs and current demands. At the same time, inflation has now taken hold of the macro economy - that analysis is above our pay grade, so we will leave that there!
We wish we had better news, but due to these factors, there are no indications that we will see material prices come down in the near future. In fact, there will likely be another wave of price increase announcements released May to June of 2022, and we expect those to keep coming through well into 2023. The good news is that the marginal increase that we are seeing come through are smaller and smaller.
What this means for building owners:
Managing your roof and building envelope budgets will continue to take considerable flexibility, insight, and attention to detail. What we wrote back in July of ‘21 still applies: manage your roof to extend life, and if you are re-roofing, move fast.
When planning and executing projects, having the right timing, the best specification for your roof, and the ability to move forward at key times will serve you well - now more than ever.
In the past, postponing a project may have been a good way to avoid temporary material or labor cost increases: at this time, that strategy may cost you more.
The fact is, material prices will continue to inflate, and the state of your roof will continue to deteriorate in the meantime.
How to move forward:
While there isn’t a lot of great news here, there are ways you can better position yourself to navigate the supply chain crisis more successfully. Having a dedicated advisor in your corner is likely one of your greatest assets. This could be a team member fully dedicated to the roofing arena, or a consultant who works as an extension of your team, but it must be someone who is staying on top of the complexities of material types, specification options, pricing forecasts, labor trends, and other key details.
A good decision is based on knowledge and not numbers. - Plato
Access to unbiased, timely information will give you the confidence to move in a direction that best protects your asset, and your budget. Confidence in your actions is inspired by informed decisions.
Feel free to engage us in a conversation about your roofing needs.
Also, look for our upcoming email on planning and budgeting for successful roofing in 2023.
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