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United State of America – Over the last year lumber prices have been the most volatile construction material of all time. The effects of lumber have caused problems never seen before by a whole generation of builders. Demand will continue to grow consistently as America attempts to fill the 6 million homes needed for Americans. Until wood is replaced, and considering lumber is technically a renewable there is not much on the horizon for replacement. Betting on lower prices is not a smart strategy nor is standing on the sidelines waiting as you budget a construction project.
Prices will go up and down like a roller coaster
Falling prices generally do not make a lasting impact on the construction industry. Prices fall from high levels to low levels for a couple of years before rising dramatically and then falling again. The expectation is for prices to rise as new houses require less lumber in the future and the backlog of homes is necessary. We will continue to see wild swings and as the Infrastructure bill becomes reality prices and supply will become a problem.
Factors to consider when budgeting for lumber on your project
Heavy costs are only faced by the end user. The consumer or contractor pays much higher prices than the lumber company because they’re able to pass the price increases to you. The one exception is directly related to location and infrastructure. Furthermore, the lumber company must pay their workers. Labor rates are a lot like a fuel costs. They must also pay for port transportation, rail and trucking. Every item of the project requires time and resources and inflation never ends. These costs are paid up front. The more complex and intricate your project is, the more you’ll pay for your material.
How to save on lumber costs
- A good way to reduce the impact of lumber costs is to reduce the volume of a building and the number of times you need to buy lumber for a project.
- ICF construction is an alternative that has been filling the void and promotes a great R-Value. ICF can reduce deliveries, energy and with new carbon initiatives work on PHIUS or PASSIVE HOUSE.
- Another great product to eliminate rebar and wire in walls and slabs is Helix MicroBar. You can also reduce the carbon footprint more. Not only do you save on lumber costs using ICF and MicroBar, but you can avoid a lot of unnecessary volatility and risk from your project right now.
- Trusses and Half Stories can bring a project back down to budget. Mass is costs. A cubic foot of space takes time and energy to maintain and operate. By eliminating space in multifamily or home attics by converting them to 1/2 floors will take less lumber and resources. The same can be said for adding 1/2 stories to basements and walk-outs.
- Firms and Professionals can utilize mill direct purchasing from mills throughout North America using a real time service exchange like MaterialsXchange
- Take advantage of Forward Pricing. Sherwood Lumber, a national leader in lumber trading and distribution offers ”Forward Pricing” to its clients and retailers. Forward Pricing locks you into a fixed price contract on the volume of lumber needed
Making these important building decisions right from the start can save you in the long run by avoiding expensive mistakes that can be corrected on-site. It also reduces waste and expense as you and your building team decide what you will be building and can work with a realistic budget. Eliminating risk as much as possible should be proactive.