AGC asks Biden for relief from soaring lumber prices

Dive Quick:

• Subsequent the unexpected, remarkable value spikes on an array of creating resources in 2021, the Involved Normal Contractors of The us has appealed to President Joe Biden to consider action to ease the skyrocketing cost of lumber.
• In a Feb. 18 letter, AGC CEO Stephen Sandherr asked Biden to urge domestic lumber producers to ramp up creation to deal with growing shortages, as perfectly as to make the crafting of a new softwood lumber settlement with Canada a major precedence of his administration.
• “The excessive runup in the latest months for the selling price of all types of lumber has made a hardship for contractors that were being termed upon previously in the pandemic to generate spaces vitally necessary for treatment of clients, social distancing of personnel and the general public,” Sandherr wrote. “AGC thinks the White House can play a constructive part in mitigating this escalating danger.”

Dive Insight:

Above the earlier year, softwood lumber costs have spiked 73%, according to the Producer Price tag Index. In 2017, former President Donald Trump applied tariffs of up to 24% on softwood lumber imports from Canada, a component contractors say is still impacting lumber costs.

With its connect with to aim on a new deal with Canada, Sandherr’s letter seemed to be aimed at mitigating the impacts of those people tariffs now, as Biden has expended much of his very first thirty day period in business office unraveling Trump’s legacy by means of govt orders. 

“While lumber is in some cases deemed a merchandise that is important only in one-family home construction and reworking, in truth lumber and other wooden products are employed in each and every type of setting up design,” Sandherr wrote. “The volatility of lumber costs and the impossibility of pinning down foreseeable future shipping dates is producing it particularly complicated for contractors to give bid costs or completion moments for future projects.”

But price raises for contractors have not just been restricted to lumber. Iron and steel scrap has surged 50.8% in the very last 12 months, including a 25.8% bounce from November to December, adopted by yet another 20.6% soar from December to January, in accordance to January’s PPI report.

Over-all, the PPI for cost inputs to new nonresidential construction — what contractors pay out to get a position done — jumped 2.5%, whilst the rate contractors say they would charge for certain work inched up just .2%.

That widening distribute of fees compared to bid prices by a component of additional than 12 has alarmed sector watchers.

“Left unchecked, these growing materials charges threaten to undermine the economic recovery by inflating the expense of infrastructure and economic enhancement projects,” Sandherr stated in a news release forward of the letter. “Widespread damage is brought about by protecting tariffs on products and solutions that so a lot of People in america want to improve their residences, modernize their infrastructure and revitalize their financial state.”