We have all heard that this summer’s drought is likely to cause price increases at the supermarket, although no one seems able to say exactly how much. You hear everything from “minimal” to “substantial” increases, depending on who is talking. But, will the drought have an impact on home improvement prices? My sources tell me this is a very likely scenario.
Think about it: Wildfires destroyed millions of acres of timber, used in everything from framing to decking to windows and doors. What may surprise you is that there are a number of products used in the home improvement industry that rely on corn production. Did you know that corn is one of the major ingredients in fiberglass, used to make, among other things, insulation, bathtubs, and windows and doors? So, between the loss of all that wood and the reduced supply of corn, consumers are in all likelihood facing increased prices on a wide variety of remodeling materials.
So, what’s a consumer to do if he is thinking about a home improvement project? My recommendation is to think faster. If you can find a way to schedule your project before the end of 2012, it would probably be in your best interest if you are looking for a lower price, and who isn’t looking to save money these days? Based on communications Evergreen Door & Window has received from major manufacturers and suppliers, odds are high that there will price increases coming by the first of the year. Granted, not all of these increases are caused purely because of the drought and wildfires this past summer, but they are certainly the deciding factor. Most manufacturers have been swallowing price increases for fuel and materials, knowing that everyone is in a tough financial situation these days, and trying very hard not to pass on every cost increase they have, instead maintaining lower margins to keep their companies running, hoping for an economic turnaround. However, with this final straw of another increase to cost of goods, many manufacturers can no longer afford to hold off on price increases and still maintain their workforce at current levels. They are facing the decision of having to increase their prices to contractors in order to keep their heads above water.
Since most remodeling companies operate on low margins as it is, they cannot afford to absorb these prices increases without either passing them on to their customers or laying off some of their own staff. It’s a vicious cycle that ends, unfortunately, with more having to come out of the homeowner’s pocket sometime in the near future.
So, take my advice – schedule that home improvement project now, before the inevitable jump in prices. Look at it this way; you’ll get to spend the winter enjoying your improved home, and you’ll save money in the long run! What could be bad about that?
Rae the Renovator