Storms that drenched Florida and Houston could dampen central Ohio’s construction industry.
Already faced with rising costs and a shortage of workers, Columbus-area contractors are bracing for possible material shortages, higher prices and delays caused by Hurricane Irma and Tropical Storm Harvey.
“I do expect there will be a tightening of supply of some materials, and some associated cost increases,” said Richard J. Hobbs, executive vice president of Columbus-based Associated General Contractors of Ohio.
“A lot of resources probably will be diverted in the short term,” he said, naming drywall, lumber and roofing materials as likely items that could be harder to come by for a time.
Nick Popma, branch manager of Capitol City Drywall & Supply on McKinley Avenue, said drywall is taking slightly longer to arrive since the storms. In anticipation of the shortage, his company ordered more drywall than it ordinarily would.
“We tried to jump the ball and get heavier on that in inventory,” he said.
Lumber prices were already up substantially this year because of tariff debates and U.S. and Canadian wildfires. Increased demand from Texas and Florida is likely to further drive up prices, said Shawn Church, editor of Random Lengths, an Oregon-based publication that tracks lumber prices.
“The rebuilding is going to contribute to the level of demand we’ll see over the next several years, but it’s hard to quantify,” he said.
Framing lumber stands at $421 per thousand board feet, up from $350 a year ago, mostly because of fires. Panel lumber, which includes plywood and “oriented strand board” costs $504 per thousand square feet, up from $390 a year ago, according to Random Lengths.
Panel lumber prices have jumped $50 per thousand square feet since Harvey, as Texas and then Florida consumers bought plywood to board up their homes and businesses, Church said.
Zillow estimates that 516,000 Florida homes were damaged by the storms. Another firm, John Burns Real Estate Consulting, estimates that 185,000 Texas homes were damaged.
Rebuilding those homes will divert material and workers for years to Texas and Florida.
“That’s something we’ve seen over the years, with Katrina and others, demand generated by rebuilding tends to occur over time, after cleanup and insurance claims,” Church said.
Jack Mautino, president of Westport Homes’ Columbus division, was warned this week by his lumber supplier to expect additional price increases on the construction staple.
“The lumber industry’s been impacted by three major hits — tariffs, wild fires and now the storms,” Mautino said.
The September Housing Market Index survey of homebuilders’ confidence reflected worry about the storms’ impact on the industry.
“The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” said Granger MacDonald, a Texas builder and chairman of the National Association of Home Builders, which puts out the monthly survey with Wells Fargo.
“Once the rebuilding process is underway, I expect builder confidence will return to the high levels we saw this spring.”
Despite the expected short-term squeeze on prices and materials, though, industry experts by and large say they’re not bracing for a huge, lingering effect.
“It looks to me as if it’s going to be just a ripple on the lake of construction, not a tsunami,” said Kenneth D. Simonson, chief economist for the Associated General Contractors of America in Virginia.
Simonson said compared to the terrible 2005 hurricane season that included the disastrous Hurricane Katrina, this year’s storms aren’t expected to have as deep and lasting an impact on things such as oil and gas production. He added that the shipping business is in better shape today than it was 12 years ago, and construction of single-family homes is still significantly off the pre-housing crash peak.