15
Sep

Hurricane rebuilding could make Iowa construction projects more expensive – KCRG

CEDAR RAPIDS, Iowa (KCRG-TV9) — Iowa contractors say all the upcoming hurricane reconstruction in Texas, Florida and Georgia is likely to hit eastern Iowans in the pocketbook as well. That’s because its likely to make new construction more expensive as the cost of building materials rises due to demand.

Workers replace shingles on a hail-damaged roof near Bertram. Contractors say the cost of construction materials could go up substantially soon due to demand for rebuilding in parts of the south.

Both roofing contractors and lumber yards all guessed a 10 to 25 percent hike in the price of items like plywood, oriented strand board (OSB) and roofing shingles may be coming in the new few months. Drywall has also increased in price. And based on what happened after Hurricane Katrina in New Orleans, higher prices for construction materials may hang around for a couple of years.

Rick DeNeve, owner of DeNeve Construction, says it’s early in the process with reconstruction down south probably not starting for weeks. But he is starting to see some early impact as he tries to get material from his suppliers.

“It’s hard to get plywood and OSB. A lot of places won’t sell to us right now because they’re saving supplies for regular buyers. They’re going to put a lockdown on it,” DeNeve said.

DeNeve says while hurricane rebuilding hasn’t really started in earnest the price hikes he’s seeing are in anticipation of much higher demand soon. He said manufacturers will likely ship more material south where they can get higher prices.

That will put pressure on prices in eastern Iowa soon.

Another local contractor, Pat Lang of P Lang Construction, said his future bids may reflect the uncertainty by sharing some of the price risk with customers.

“What you have to do is put a clause in there that we’re basing prices on our costs exactly today…for example, plywood went up $4.00 a sheet last Friday. $4.00 in one single day, that’s unheard of,” he said.

Lang says the contract clause would say if material prices go up after the contract is signed, then the final price for the construction work would also go up to reflect the higher costs.

The higher construction material prices now are coming on top of rising lumber prices this spring due to a tariff dispute between the U.S. and Canada. Contractors say those higher prices from last spring haven’t fallen much, if at all.

So the coming increases will make building even more expensive soon.