This recent hurricane season was a brutal one and its consequences are far reaching both for those who live in the paths of Harvey, Irma, and Maria and for the country at large. Harvey itself is predicted to be the most expensive natural disaster to hit the country since 1980 – the first year these records were kept – and the economic impacts of its destruction to the gulf oil industry are starting to be felt.
When petroleum is affected, the construction industry can reliably expect to see prices rise in two areas: shipping and petroleum-based materials. Natural disasters are usually followed by price increases, but with Harvey these are expected to be more dramatic. We’ve already heard the price of PVC will go up 28% due to production costs associated with the resin PVC is derived from and more materials are certain to follow suit. A price spike as big as 28% will most likely come back down, but we can expect a general increase of 5% in material costs to plateau rather than peak. We can predict a 3 to 5% hike in shipping costs – prepare for this figure to last one year before dipping.
Hardypond Construction plans ahead for such times. Knowing price increases are imminent, we make efforts to purchase materials in bulk ahead of when we would normally place an order. We also make attempts to lock in prices with our suppliers whenever possible. This helps us mitigate the negative economic impact of weather conditions on the bottom line for ourselves and for our clients.
If you have a current or upcoming project and want to know how your bottom line could be affected by the recent weather, give us a call at 207-797-6066.