AGC asks Biden for relief from soaring lumber prices

Dive Brief:

• Following the unexpected, dramatic selling price spikes on an array of developing products in 2021, the Involved Normal Contractors of America has appealed to President Joe Biden to acquire motion to ease the skyrocketing price of lumber.
• In a Feb. 18 letter, AGC CEO Stephen Sandherr questioned Biden to urge domestic lumber producers to ramp up manufacturing to address growing shortages, as properly as to make the crafting of a new softwood lumber settlement with Canada a major precedence of his administration.
• “The extreme runup in current months for the price of all types of lumber has established a hardship for contractors that were being referred to as upon earlier in the pandemic to build areas vitally desired for care of individuals, social distancing of staff and the community,” Sandherr wrote. “AGC believes the White Residence can perform a constructive position in mitigating this increasing threat.”

Dive Perception:

Above the past calendar year, softwood lumber rates have spiked 73%, according to the Producer Price tag Index. In 2017, former President Donald Trump implemented tariffs of up to 24% on softwood lumber imports from Canada, a factor contractors say is still impacting lumber charges.

With its contact to concentration on a new offer with Canada, Sandherr’s letter appeared to be aimed at mitigating the impacts of all those tariffs now, as Biden has spent a great deal of his initially thirty day period in office unraveling Trump’s legacy through government orders. 

“While lumber is from time to time regarded a product or service that is important only in solitary-family members household design and reworking, in reality lumber and other wooden products are used in every type of constructing development,” Sandherr wrote. “The volatility of lumber costs and the impossibility of pinning down potential delivery dates is earning it particularly difficult for contractors to present bid charges or completion instances for upcoming assignments.”

But value raises for contractors haven’t just been minimal to lumber. Iron and steel scrap has surged 50.8% in the final 12 months, which includes a 25.8% leap from November to December, followed by a further 20.6% bounce from December to January, in accordance to January’s PPI report.

Over-all, the PPI for cost inputs to new nonresidential development — what contractors spend to get a position completed — jumped 2.5%, when the rate contractors say they would charge for particular careers inched up just .2%.

That widening unfold of expenses as opposed to bid selling prices by a factor of much more than 12 has alarmed industry watchers.

“Left unchecked, these soaring materials prices threaten to undermine the financial recovery by inflating the cost of infrastructure and economic progress assignments,” Sandherr explained in a news release ahead of the letter. “Widespread damage is induced by preserving tariffs on items that so quite a few Individuals have to have to boost their homes, modernize their infrastructure and revitalize their financial state.”