If you’re a contractor in Brooklyn, NY, you’ve probably noticed construction lumber costs, as well as the cost of other materials like steel, are increasing at a dramatic rate. It’s important to understand the factors driving the extreme price jumps so you can make smart financial decisions for the future of your business. Here’s what you need to know about the current lumber and steel market.
Shocking price increases
If you’ve stopped by your trusted home building materials supplier in Brooklyn, NY recently, you likely were surprised by some of the prices you saw. Between 2020 and 2021, the price for certain iron and steel products increased around 15.6 percent. The prices for lumber are even more shocking, showing a nearly 73 percent increase between January 2020 and January 2021. The price increases on these materials are having a ripple effect, bumping up the costs for vinyl siding, drywall, copper and many other building supplies.
Supply chain issues
The price increases in building supplies in Brooklyn, NY, including construction lumber costs, are due in large part to the global pandemic. As countries shut down their economies in early 2020, the demand for lumber, steel and other building products came to a halt—but only temporarily. As factories started to reduce their production capacity, problems with the supply chain started to arise. People who were spending more time at home began impacting the demand for lumber as they took up DIY projects and home renovations.
The impact of the DIY movement can be seen in the record-breaking profits of home improvement stores. The scaled-back operations at factories couldn’t keep up with this unexpected demand, and DIY builders and makers decimated stock of lumber, in particular. The supply chain still hasn’t fully rebounded, leading to the dramatic price increases.
Contractors are adapting
Whether you specialize in residential or commercial construction, staying on budget is key to running a successful contracting business. If you’re noticing an increase in prices at your usual home building materials supplier in Brooklyn, NY, you need to find other ways to cut costs so you’re able to make a profit on every project. Use the following strategies to maximize your profits:
- Increase performance: By reducing the amount of time you and your team spend on each project, you’ll offset the increasing cost of materials.
- Try new materials: Whenever it makes sense, substitute materials for cheaper options. For example, since plywood prices have gone through the roof, substitute oriented strand board (OSB), which is normally more expensive.
- Adjusting contracts: Give your contracts some adjustments to account for fluctuating material costs. Write contingencies in your contracts to cover you in case of price increases.
As a professional contractor in Brooklyn, NY, you need to be aware of fluctuations in the cost of your building supplies, especially when it comes to steel and construction lumber costs. By staying aware of current trends, you’ll be able to make better bids for projects so rising costs don’t eat away at your bottom line. Whether you’re remodeling a kitchen or constructing a home from the ground up, contact Luisi Building Materials Company, Inc. to provide you with affordable building materials for every project.
Categorised in: Building Materials
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