Q1 2023: Materials Updates

General:

Material pricing continues to be plagued by; Inflation, rising interest rates, supply chain issues, construction market, and possible global recession impacting manufactures continue to top the list of forecasters’ concerns for the coming year. In summary, since our December 4Q report we continue to see a volatile materials market with many ups and downs. The construction market will play a big part in where material prices end up. Residential construction is flat, showing early signs of a decline. Non-Residential building shows an overall 10% drop from 2022 to the start of 2023. However, this varies significantly with building type; Manufacturing down 40% while Stores and Shopping Centers up 4%. Non-Building construction such as highways, bridges, and environmental projects are up 15%.

Transportation is still impacted due to record high freight costs which seem to be subsiding. Projections show declining Container Freight across the seas by 30-40% in 2023. Trucking continues to face a continuing challenge. Diesel prices are likely to remain at $4 + per gallon through 2023 and there is a driver shortage to the tune of needing 1.2 million more drivers in the next 10 years.

HVAC Equipment:

Still remains one of the most impacted products. We saw over 25% increases in 2022 and the increases are continuing in 2023. TRANE announced a 10% increase to take effect Jan 9, 2023. The long-term projections are another 25% increase in 2023 with some new SEER2 requirements.

Metal Stud Framing:

The Metal Stud pricing continues to be very unpredictable! Currently the price is lower than the mid-January 2023. Lead times are increasing to 9 to 12 weeks. The following details the movement specifically on Metal Stud Framing materials and just how erratic they are.

Steel Stud Material manufactures announce an erratic run of price drops totaling approx. 34%:

·9% drop in price mid-Dec

·10% drop end of Dec

·15% drop by mid Jan

Steel Stud Material manufactures reverse the slide and announce increases totaling approx. 20%:

·5% increase now, comprised of 2 letters announcing price increases.

·10% increase March 1st

·5% increase April 1st

To put the current pricing in perspective, using a common 6” 16 Gauge Steel Stud as an example; pre-pandemic cost $1,250 MLF (per 1,000 Lineal Feet) this stud reached almost 3x the cost at $3,450 MLF at the peak during the pandemic. We had a steady slide to $2,350 MLF going into Dec 2022 at $2,350.

Gyp Board Products:

The major suppliers notified distributors of 20% increases going into 2023. This includes all Drywall products. In summary, the “wallboard” products can be categorized into three groups; 1) Sheetrock including the regular gypsum products, Type X Firecode, etc… 2) Glass-mat products such as Densglass gold, the yellow board you see on the exterior of buildings 3) Cement board for ceramic tiler backer board. 4) Fiberock products, also a tile underlayment. All products continue to rise in cost and the Glass-mat products have supply issues.

Framing/Gyp Accessories:

We continue to see steady increases with these products. The screw and steel pin manufacturers continue to pass on major surcharges to the consumer due to increased overseas shipping costs originally due to increased container cost not compounded by high fuel prices. However, some shipping cost relief is being seen, it will take a month or two to realize the on the shelf reduced pricing.