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building costs
For those of you in construction, what are you seeing in price increases due to the hurricanes. In my area, Kentucky, the 2004 hurricanes in Florida pushed up the lumber and drywall prices during the winter and early spring. They dropped back during the summer.
Another issue is material shortages. Have any of you experienced this. I work for an electric utility and some material deliveries have been pushed back for a few months, but this should improve by winter or early spring.
From what I have read the housing starts in July and August where down considerably from earlier in the year and in 2004. This should help on the supply and demand.
I hope to build in the spring, but not if lumber costs are considerably higher and materials are in short supply.
Dave
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The US Govenment has sent letters to some equipment manufacturers ( HVAC and Electrical Switchgear) that they may be putting their products on allocation to the commercial market until it is determined how much equipment will be needed for the reconstruction effort. Whether you like the pricing or not, you may not be able to get some building components until after the first of the year.
Structural Steel is another story. We are back to surcharges, and as of this month, the surcharges are back up to $120/ton from the mills. Blame it on the scrap market, the Chinese, or whatever. Steel surcharges are back, along with increased trucking surcharges due to fuel costs. We have one hell of a time trying to figure out how to price purchases that are 2-3 months out. Prices are at the time of delivery, not the time of order.
How's that for taking care of your customers.
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Do you think Bush will rethink his first present to the American Business Interests. The large tarriff he placed on the Canadian lumber entering the country? I guess it would be logical and?!!!!
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Beagle,
Most of the materials we purchase are by competitive bids and in the last year or so the bid responses have an adder for metals and now fuel surcharges.
We have an annual contract with a manufacturer of single phase pole and pad mount transformers. Last year I received an email about adding a surcharge to our current order. I refused to accept the surcharge because the contract didn't allow for surcharges. The current contract has a metals surcharge statement.
It's wrong for you and I as the consumer to pay higher costs because the Chinese want our metal and in turn create shortages resulting in higher costs. I feel this is a fault of the Republican administration, as generally speaking the republicans support and cater to big business.
However, the situation with the hurricanes and the shortages related to the rebuild would have happened anyway.
As a local utility we haven't increased our rates nor do we add adjustments for metals and fuel. However, we do pass on fuel adjustments from our supplier and surcharges in some instances are passed on to the customer.
I should have built a couple of years ago, but hindsight is always 20/20.
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I can not speak to the metal shortage, but I know there area a lot of saw mills in Canada idled by the Republican policies. A simple stroke of the pen could provide much more supply. What is the current surcharge (Tariff)? 40%?
To me that is the same logic as placing a tariff on Saudi oil because it costs less to pump. We must import more than 1/2 the oil and we must import 1/3 our soft wood lumber.
Good grief we only get the lesser grades out of Canada anyway, the prime lumber goes to Japan or Europe that pays premium prices.
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Slightly off-topic, but I talked to a guy that builds houses on the side of his regular job (electrical utility lineman). This was about 3-4 weeks back. At that time, he said plywood had jumped $5 a sheet.
Also, my transformer had blown and needed replacing. I was lucky. My utility is down to 25 transformers left for a 50 x 70 mile service area (mostly rural) for the rest of teh year. Everything else went south. It would suck to lose a transformer in Iowa in December and be told the utility has nothing left.
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We are in good shape on transformers today, however, that could change in a couple of weeks. This morning I had my engineers go over all potential projects we know about and summarize the material we need to provide service to those projects. We will go ahead and place orders for conductor, transformers, poles, and associated hardware, because almost everything is placed on backorder.
Iowafun, I understand your concern, as an outage anytime is no fun, but during the winter it can be life threatning. Do you have any type of backup heat or generator?
We recently lost a 8mgd water pump at our treatment facility. We have three pumps and one was at Peerless for repair. We acquired a 5mgd backup pump that runs on a diesel engine. Even though we can purchase diesel at discount the pump is costing us about $900 per day for fuel.
With natural gas prices going through the roof and a potential shortage of electric materials, an abnormally cold winter nationwide could be devastating.
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Peters
Aren't the Canadian mills subsidized by the government?
Maybe one of our members to the north could shed some light ?
I remember something about it in the papers a while back.
I often see Canadian trucks down here in Maine buying our
veneer oak logs and hauling them back home. It use to be said that they (Canadian lumber mills) came here to Maine and bought our softwood and trucked it back to Canada. Milled it and sold it back to us at competive prices. Not sure if this is still the case or not.
I know the Maine lumbermen were yelling foul without the tarriffs?
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The American lumber industry calls it "subsidy".
Canadians call it "job creation".
The whole thing stems over the sale of standing timber.
In Canada huge tracts of land are publicly owned. These lands are actively logged and re-planted. This creates jobs that would otherwise not exist.
The problem is, the timber is sold by the Government, to Canadians only, and for somewhere between 25 - 50% of what an "open market auction" of that lumber would bring if it was private timber located and sold in the United States.
So, like with most things, if someone else can sell it for considerably less, then it must be tariffed to "level the playing field".
Problem is, who's to say what the US Government does is right, and the Canadians are wrong???
It applies to lots of things, not just lumber, the American beef industry uses much the same arguement to say that Canadian Beef is unfairly subsidized, even though many US farmers graze their cattle on BLM land for almost nothing.
It's strange however that nobody cries foul about the electricity, natural gas, oil or water that finds it's way south of the border. Hmmmmmmmm....... ;->
Best of luck.
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Kyvette, I'm probably better off than most should something happen to my transformer this winter. My house is wired up for a generator. I don't own one, but could buy one and have it running quickly should the need arise. All of the connecting breakers and such are ready so all I would need is a generator and fuel for it. Man, I'd hate to have to foot that fuel bill...
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