Happy New Year! Just like last year the winter of 2012/13 is shaping up to be unusual for a variety of reasons. Last winter we benefited from an unusually mild winter and we were all able to be in the field on a more consistent basis and our customers did not feel the need to delay projects due to poor weather. This year we are already into mid-January and our weather has again been milder than expected. However, what has changed from last year, is the commodity market and the vendor market as it relates to pricing increases. Last year the markets were flat and predictable to the time of the year. This year many vendors in the building materials categories have announced or are expected to announce price increases for the year and many are saying there are more on the way. In addition, the commodity market, as you will see below is at levels higher then we have seen since 2004. Some people believe this is the floor for the year and prices will continue to increase. Other people are saying this is unsustainable and that the market will have a correction and a fall back as part of a healthy market. Speculators have begun to place money in the market and exports are stronger than ever. This means that we will see volatility returning to the market in ways we have not seen in many years. Many suppliers and wholesalers do not carry the inventory they once did and therefore we all feel the swings of the market more acutely than we did in the past. Please keep an open line of communication with your salesperson and let them know when projects are expected to start so we may work with you more effectively to ensure a profitable project for all of us.
Cost of Framing Materials Continues to Climb
With January now behind us, the new year is officially underway and reports prove the slow and steady growth of building material prices continues into 2013. Demand for materials has increased framing material costs 3.21% when compared to December of last year and 30.71% when compared to this same time last year. This serves as a great example of the changes that the building industry has experienced in the last year alone.
Remodeling on the Rise
Reports of last year's activity prove that home remodeling is slowly and steadily making an upward turn. Through November 2012, improvement expenses on new residential structures averaged a seasonal adjusted rate of $123 billion, up from $114 billion in 2011, according to the Random Lengths Reports. The Harvard Joint Center for Housing Studies forecasts the improvements to continue, predicting a double-digit percentage on improvement spending in the first half of 2013. Industry experts attribute the remodeling trend to a high percentage of distressed home sales and buyers choosing the more economical decision to fix up a home rather than buy or build a new one.
Sandy Relief Efforts Impact Supply
In the wake of Superstorm Sandy, the building industry has been met with both opportunities and challenges to meet demands for products on the east coast. Timber prices have increased substantially, and distribution is struggling to keep up. Demand for Southern Pine 2x4s and 4x4s has increased to repair fences, boardwalks, piers and docks in the northeast. In the west, high demand for small timbers, such as 2x4, have put pricing gains at their peak since 2005. An unusual spike in orders throughout the west in combination with hurricane relief efforts, have mills adjusting production plans to accommodate the high-volume orders in a time when supplies have been limited.
With January now behind us, the new year is officially underway and reports prove the slow and steady growth of building material prices continues into 2013. Demand for materials has increased framing material costs 3.21% when compared to December of last year and 30.71% when compared to this same time last year. This serves as a great example of the changes that the building industry has experienced in the last year alone.
Reports of last year's activity prove that home remodeling is slowly and steadily making an upward turn. Through November 2012, improvement expenses on new residential structures averaged a seasonal adjusted rate of $123 billion, up from $114 billion in 2011, according to the Random Lengths Reports. The Harvard Joint Center for Housing Studies forecasts the improvements to continue, predicting a double-digit percentage on improvement spending in the first half of 2013. Industry experts attribute the remodeling trend to a high percentage of distressed home sales and buyers choosing the more economical decision to fix up a home rather than buy or build a new one. 
