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Thread: Construction costs are out of control

  1. #81
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  2. #82
    Quote Originally Posted by Darth_Uno View Post
    As much as I hated to do it, I went to several customers over the last few days and asked for them to cover the costs of their framing, roofing and siding packages. I can no longer continue to absorb these costs if I want to stay in business. On some, the increases have blown through my profit margin.

    Some were immediately agreeable and said they expected this, some flat out said no, and some said they'd let me know.

    We've recently switched to cost plus contracts, but with our fixed price contracts we didn't have anything in there about material prices because who'd have predicted this? So there's really not much I can do about the people who wouldn't pay. I'll still honor my contract and do as good a job as I'd intended to all along. Karma shall repay me sevenfold, but that's cold comfort when I can stay home and make no money, but I'm actually losing money by working.
    I've had to have conversations with my biggest contractors, telling them that I couldn't give them the 30 day terms any more. My pockets just aren't deep enough. They all understand and we settled on 14 days. We have a lot of DIY large project jobs and in the past we have held quotes for 14 days. In Oct, 2020 we went to 7 days. Last month we went to end of business day on materials quotes.

    Surprisingly, we have been slammed. Unfortunately people are pre-paying for jobs that are weeks out, hedging that the prices aren't going to stop going up. My guys pull the materials, wrap them and store them. I am really worried that once those packages roll out, the world is going to come to a screeching stop.

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  4. #84
    Site Supporter hufnagel's Avatar
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    I'm just going to have to ride out this storm before I can re-deck my deck.
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  5. #85
    Quote Originally Posted by AKDoug View Post
    That's part of it for sure. Even with guys that followed the rules during the paper log days, it was pretty easy to pencil whip 10 minutes at the end of the day without a violation. With the ELD's commercial vehicle enforcement, as well as company safety guys. are penalizing guys heavily for just being a few minutes in violation. Guys just get tired of the B.S. and move on.

    In my case, 90% of my business qualifies under the under 150 miles from home base exemption, so it's not a hang up for me and my guys. We don't even have to run ELD's in my trucks.

    You think it's bad now? In 2022 they are doing away with our ability to teach new drivers in-house unless we have a "school" set up with insurance and certified instructors. A lot of good drivers got their starts under the tutelage of friends, family or good companies willing to train. That will be gone in 2022 and force new drivers to spend $1000's of dollars to get their training from outfits who have no real business teaching drivers. I've trained 12 drivers in 25 years to their A class licenses. All of them passed their driving test on their first try. We have had ZERO wrecks or moving violations in that time. It has come to the point that getting a CDL is more regulated than getting a commercial pilot's license.
    Kind of related - the last couple of weeks I've noticed numerous loooong trains - locomotives at both ends and one one or two in the middle - rolling through town and blocking streets for much longer than normal. Most of them are all container - still get other trains through with mixed container, boxcar, grain and chemical cars - but the longer ones are all container.

  6. #86
    Site Supporter rob_s's Avatar
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    Quote Originally Posted by hufnagel View Post
    I'm just going to have to ride out this storm before I can re-deck my deck.
    I’ve bout two decks and an outdoor bar in the last 6 months or so. At least in my area, PT lumber doesn’t seem to have been affected as much.

    Also, having built said two decks, I won’t surface a deck with natural wood ever again. I’d do composite every time, even at 2x the cost. There are some amazingly natural looking composites available now, and the labor savings in dealing with and engineered material vs natural are huge. Even though my labor was “free” it’s really not as my free time is my most valuable commodity. I would gladly pay more for a material that gave me back some of that time.
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  7. #87
    Site Supporter rob_s's Avatar
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    While we’ve mostly been taking about wood, and smaller scale residential level projects, the larger commercial and multi family sectors are feeling it too. We just had a steel subcontractor tell us that the metal roof joists for a warehouse we’re bidding have a 12 month lead time. A year. If we started construction tomorrow we KD stand the tilt walls and then wait 8-10 months to get the joists.

    The cool thing is that this is forcing people to look at alternative building materials and methods. There are a lot of very innovative products out there that previously haven’t gotten any traction due to (a) higher initial costs (b) fear of the new and (c) people making enough money on the old ways to have no interest in the new. Total lack of availability of their traditional building material has them looking hard at alternatives. That warehouse, for example, may wind up with some sort of composite or even hollow core concrete (not new, but making a comeback) roof.

    Beyond materials is labor. We’re getting reports from almost all sectors that people would rather stay home and collect their government checks than go to work. We had a job ask for ten laborers for cleanup and they got 4 guys at a tradesman rate.

    Combine the labor issues AND the material issues, and the industry is even further primed to look at other innovations such as offsite construction (Prefab, modular, etc.).

    If I was building a one-off home on a private parcel needed it soonish and didn’t want to wait and ride this out and the local contractors were telling me their tails of woe, I’d be down at the local mobile home seller asking about modular options. The Prefab home sector has a lot more to offer than what most people realize. And the more folks do that the more that industry will continue to innovate.
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  8. #88
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    I'm sure there's a number of contributing factors to the price increases, but some people are starting to question whether the explosive increase in construction costs is the first sign of hyper-inflation, caused by massive helicopter spending.

    The other thread on rental car costs is also relevant to this conversation.

    I'm not supporting the hyper-inflation theory, but I'm keeping an open mind.

  9. #89
    Site Supporter OlongJohnson's Avatar
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    Was speaking with a local yesterday, and they said the mill a little north of @Borderland has more raw logs, in-process, and finished, wrapped lumber ready to ship than they've ever seen on location since it opened. Wondering whether it's a transportation shortage or what.
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    Not another dime.

  10. #90
    I'm not sure prices will ever come down.

    With my state (FL) voting to move to $15 minimum wage in the next few years, a price increase is expected anyway. But now the folks selling lumber can see that people really need it, and that demand will support plywood at an enourmous markup. Does anyone really think prices will come down when availability comes back? Those companies can pocket the extra profit and leave pricing where it is.

    I honestly don't see a way out of this rabbit hole. And it isn't just construction material.

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