Verisk Industry Trends for 2nd Quarter 2018
Xactware's Pricing Data
This bulletin gives a brief overview of recent pricing trends in the property insurance, construction, and restoration industries.
As a reporter of market-specific pricing information for repairing or rebuilding structures and replacing personal property, Xactware conducts hundreds of thousands of industry surveys, and reviews millions of data points per year submitted through field estimates written by contractors and adjusters as well as electronic data feeds provided by retail merchants. This extensive library of research enables Xactware to provide a comprehensive report of important industry trends.
Pricing News — 2018 - 2nd Quarter
Materials
Material costs are highly variable and are sometimes impacted by factors such as fuel costs, changes to industry practices, or natural disasters. Xactware closely monitors a wide variety of material costs across the country to ensure its price lists reflect any recent changes to pricing.
In the first quarter of 2018, Xactware observed changes to several material categories. Interior trim material costs had the largest quarterly per cent change; they increased 3.91 per cent since January. Lumber material had the largest annual per cent change with 20.11 per cent increase. We discuss this change in more detail below.
The Material Composite Index report tracks a combination of several commonly used material components, including floor covering, paint, and roofing. The index showed a 1.35 per cent increase in the first quarter of 2018 and a 4.38 per cent cost increase since April 2017.
Labour
Xactware’s Pricing Data Services also surveys thousands of contractors across the country each month to determine what they are charging for labour. The most significant annual change occurred in the labour cost of a drywall installer, which increased 3.82 per cent in the first quarter of 2018 and 6.76 per cent since April 2017.
The Retail Labour Index tracks a combination of several common trades, including floor covering, painting, and roofing among others. In the first quarter of 2018, the index showed a 1.34 per cent cost increase. Since April 2017, it showed a cost increase of 4.28 per cent.
Combined Trends
The Combined Labour and Materials report is based on monthly building cost data published by Xactware. It comprises a set of commonly used items and may be used as an indicator of trends within the marketplace. The combination of labour and materials makes up the majority of Xactware price list items. Tracking the per cent change for the cost of these items provides a good gauge of the general market.
The Combined Labour and Materials report showed a cost increase of 0.93 per cent in the first quarter of 2018 and a 3.98 per cent increase since April 2017.
Fuel Costs
Fuel costs are extremely volatile and are a factor in item pricing, since high oil prices can push up the price of some raw materials. Fuel prices increased 7.98 per cent over the first quarter of 2018 and 19.28 per cent over the last year. Xactware’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.
Lumber Material Costs
The drastic annual increase was caused by multiple factors including new tariffs on softwood lumber sent to the United States and severe fires in British Columbia. These events decreased the lumber supply, driving up the cost in both Canada and the United States.
We looked at the percent change of costs for OSB sheathing, dimensional pre-cut stud, plywood sheathing, dimensional plate material, dimensional lumber, and treated dimensional lumber. Plywood sheathing had the largest per cent increase since April 2017 at 41.50 per cent.
The cost of pre-cut dimensional studs increased 23.58 per cent since January 2018.
Xactware is monitoring these factors and will continue to report any resulting pricing changes in future price list publications.
Where to Learn More
Annual Property Report
Xactware publishes annual property reports that focus on key trends during the previous calendar year. To order a copy of Xactware’s Property Report for Canada or the United States, please visit the Xactware Online Store.
Industry Trend Reports
Using Industry Trend Reports, Xactware customers can examine pricing trends on national, state or province, and local levels for key material and labour pricing changes in multiple trades. Trends can be viewed by the month or over extended periods of time. For more information about Xactware’s Industry Trend Reports, or to receive access to them, please contact your sales representative or call 1-800-424-9228.
Pricing Methodology White Paper
For more information about Xactware’s methodology for researching and publishing pricing information, please see the Pricing Research Methodology white paper on the eService Center.
Unless otherwise stated, the values reported in this bulletin are national averages for Canada and will vary from local prices.