AGC asks Biden for relief from soaring lumber prices

Dive Transient:

• Pursuing the unexpected, extraordinary price tag spikes on an array of constructing materials in 2021, the Linked Normal Contractors of America has appealed to President Joe Biden to take motion to relieve the skyrocketing charge of lumber.
• In a Feb. 18 letter, AGC CEO Stephen Sandherr requested Biden to urge domestic lumber producers to ramp up creation to tackle expanding shortages, as well as to make the crafting of a new softwood lumber settlement with Canada a leading priority of his administration.
• “The serious runup in recent months for the selling price of all categories of lumber has established a hardship for contractors that were being called on before in the pandemic to develop spaces vitally required for care of clients, social distancing of personnel and the general public,” Sandherr wrote. “AGC believes the White Residence can enjoy a constructive job in mitigating this expanding danger.”

Dive Insight:

More than the past year, softwood lumber costs have spiked 73%, according to the Producer Price tag Index. In 2017, former President Donald Trump carried out tariffs of up to 24% on softwood lumber imports from Canada, a element contractors say is nevertheless impacting lumber prices.

With its simply call to emphasis on a new offer with Canada, Sandherr’s letter seemed to be aimed at mitigating the impacts of people tariffs now, as Biden has put in much of his initial thirty day period in business unraveling Trump’s legacy through govt orders. 

“While lumber is at times deemed a item that is critical only in solitary-spouse and children property building and reworking, in actuality lumber and other wooden items are utilised in every sort of setting up building,” Sandherr wrote. “The volatility of lumber price ranges and the impossibility of pinning down upcoming supply dates is making it very difficult for contractors to provide bid rates or completion times for future jobs.”

But expense will increase for contractors haven’t just been confined to lumber. Iron and metal scrap has surged 50.8% in the previous 12 months, like a 25.8% bounce from November to December, followed by one more 20.6% bounce from December to January, according to January’s PPI report.

In general, the PPI for price tag inputs to new nonresidential design — what contractors pay out to get a job finished — jumped 2.5%, while the price tag contractors say they would cost for distinct work inched up just .2%.

That widening unfold of expenses vs . bid price ranges by a variable of extra than 12 has alarmed industry watchers.

“Left unchecked, these mounting products prices threaten to undermine the economic restoration by inflating the price tag of infrastructure and economic enhancement jobs,” Sandherr claimed in a news release in advance of the letter. “Widespread hurt is caused by maintaining tariffs on products that so quite a few People in america require to enhance their residences, modernize their infrastructure and revitalize their financial state.”