June 21, 2021

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Anything but ordinary

AGC asks Biden for relief from soaring lumber prices

Dive Short:

  • Next the unexpected, extraordinary value spikes on an array of making resources in 2021, the Affiliated Standard Contractors of The united states has appealed to President Joe Biden to get motion to ease the skyrocketing expense of lumber.
  • In a Feb. 18 letter, AGC CEO Stephen Sandherr questioned Biden to urge domestic lumber producers to ramp up creation to deal with expanding shortages, as well as to make the crafting of a new softwood lumber agreement with Canada a top precedence of his administration.
  • “The serious runup in the latest months for the rate of all categories of lumber has established a hardship for contractors that had been called upon before in the pandemic to make spaces vitally required for care of clients, social distancing of workers and the general public,” Sandherr wrote. “AGC thinks the White House can enjoy a constructive position in mitigating this escalating threat.”

Dive Insight:

Over the past 12 months, softwood lumber price ranges have spiked 73%, according to the Producer Price tag Index. In 2017, former President Donald Trump executed tariffs of up to 24% on softwood lumber imports from Canada, a issue contractors say is nonetheless impacting lumber price ranges.

With its connect with to concentration on a new deal with Canada, Sandherr’s letter appeared to be aimed at mitigating the impacts of those people tariffs now, as Biden has spent substantially of his 1st thirty day period in business office unraveling Trump’s legacy by using government orders. 

“While lumber is sometimes viewed as a products that is essential only in single-household home building and reworking, in actuality lumber and other wood goods are utilized in each individual type of constructing development,” Sandherr wrote. “The volatility of lumber rates and the impossibility of pinning down foreseeable future shipping and delivery dates is earning it incredibly difficult for contractors to present bid prices or completion times for approaching assignments.”

But cost will increase for contractors have not just been restricted to lumber. Iron and steel scrap has surged 50.8% in the final 12 months, which include a 25.8% leap from November to December, adopted by yet another 20.6% leap from December to January, in accordance to January’s PPI report.

General, the PPI for price inputs to new nonresidential development — what contractors pay back to get a career finished — jumped 2.5%, even though the price tag contractors say they would demand for precise careers inched up just .2%.

That widening spread of charges vs . bid price ranges by a variable of more than 12 has alarmed field watchers.

“Left unchecked, these rising resources prices threaten to undermine the financial recovery by inflating the value of infrastructure and economic development jobs,” Sandherr reported in a news launch ahead of the letter. “Widespread harm is induced by preserving tariffs on goods that so many Us citizens will need to increase their homes, modernize their infrastructure and revitalize their economic system.”