Okotoks contractors are feeling the blows of construction material increases, but not as much as their clients.
Over the past year, costs of items like oriented strand board (OSB) and 2x4x8-foot lumber have skyrocketed by close to 300 per cent, and other materials like drywall, steel and insulation have followed suit. In addition, plumbing fixtures and building materials are getting harder to come by with shortages on the market.
That takes its toll on contractors who are dealing with an increased demand on renovations and home builds, said Jason Law of MBL Construction.
“A normal 22x22-foot garage that we would build, before – even right at the very beginning of the pandemic – it would be about $28,000, with your concrete and everything else involved from the ground up,” said Law. “Now that same structure, to make the same profits, we’re at $36,000 and that’s because of the materials.”
He said 2x4x8-foot lumber went from about $2.60 each last year to $8.20 currently, and OSB has climbed from about $13 to $51.98.
There are a few reasons for the changes on the market, he said.
One reason is raw materials are being exported internationally before being processed and turned into lumber. Also, a boom in new housing in the United States is seeing a lot of building materials sent south, he said.
“Part of it is also supply and demand,” said Law.
He said the price of OSB shot up first, when the glue necessary to create boards was scarce and manufacturers couldn’t create sheets fast enough to keep up with the industry.
There is also a shortage on vinyl siding and medium-density fibreboard (MDF) used for trim like baseboards and door casings, he said.
“So we’re having shortfalls to be able to finish up houses,” said Law.
Demand for these products soared at the same time production was limited with factories operating at reduced capacity – both due to COVID.
Law said during the pandemic, his company did more work than it had in 2019 with people opting to renovate their homes.
Some people have been shocked by the price, he said, an issue he’s afraid will last for the long-term because it will take time for the market to correct itself.
“When we have price increases, there’s usually not drastic drops back to the original price,” said Law. “The prices should, and will, come down. They will never come down to where they were and when they do come down it’s going to be slowly.”
Rod Danforth, assistant general manager with Your Custom Home, said customers have been hit the hardest because increased costs to contractors has to be passed on.
Besides price, he said one of the most notable differences in doing business now is offering a much shorter window for quotes to be honoured.
“If I was to give you an estimate on a deck over a year ago, that estimate would have lasted you for two months and you could decide when you’re ready to do it,” said Danforth. “Now we’re lucky if we can give two weeks because we have to honour that price.
“We’re putting two weeks on there because that price could skyrocket and eat all our profit up.”
When contracts are signed, the ball gets rolling much faster now to ensure the product will be available to complete projects, he said.
Some renovation jobs that have included plumbing fixtures have been put on hold for up to six weeks waiting on fixtures to arrive, he said.
“We’re keeping taps on-hand, so if we’re doing someone’s kitchen we’re not holding up the whole kitchen because there’s no tap,” said Danforth. “We’ll put in a tap we have at the office until that tap comes in.
“It’s a lot more work.”
He said for the time being contractors are lucky people still want to get their projects done despite COVID-19 and the economy.
Prices and availability of construction materials won’t improve until everything beings to settle, he said.
“Everything has to be back to normal, COVID has to be under wraps, people have to get back to living,” said Danforth. “Forestry needs to get back up to get our trees, to get our wood, plumbers being able to get our products like they used to.”
