Verisk Industry Trends for 4th Quarter 2020
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 — 2020 - 4th 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 third quarter of 2020, Xactware observed changes to six key material categories. Lumber material costs sharply increased 38.3 per cent over the quarter and 38.34 per cent since October 2019.
The Material Composite Index report tracks a combination of several commonly used material components, including floor covering, paint, and roofing. The index showed a 7.65 per cent increase in the third quarter of 2020 and an 8.7 per cent increase since October 2019.
Labour
Xactware’s Pricing Data Services team also surveys thousands of contractors across the country each month to determine what they are charging for labour. The most significant change observed in key labour categories occurred in the labour cost of a brick or stone mason, which increased 3.26 percent over the third quarter of 2020 and 12.41 percent since October 2019.
The Retail Labour Index tracks a combination of several common trades, including floor covering, painting, and roofing. In the third quarter of 2020, the index showed a 1.25 per cent cost increase. Since October 2019, it showed a cost increase of 5.87 per cent.
However, the individual trades that contribute to the Retail Labour Index varied in their per cent change over the quarter. The most significant quarterly change occurred in the labour cost of an ornamental iron installer which increased 4.9 per cent since July.
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 3.74 per cent in the third quarter of 2020 and a 5.62 per cent increase over the year.
Fuel Costs
Fuel costs are extremely volatile and are a factor in item pricing, since low oil prices can push down the price of some raw materials. Fuel prices have decreased 1.68 per cent over the third quarter and have also decreased 13.31 per cent since October 2019. Xactware’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.
Lumber
Since October 2019, lumber prices have dramatically increased by 38.34 per cent in Canada. During that time, several factors have contributed to a shortage in supply of common lumber materials, including Covid-19 and its associated restrictions, as well as an increase in building activity (including DIY builders) which didn’t slow down much since the beginning of the current pandemic. With this shortage of supply, prices for certain common lumber materials have rapidly increased. For example, sheathing material prices have aggressively increased 40.6 per cent in Canada from July to October of this year.
Personal Protective Equipment
Due to the current impacts of COVID-19, Xactware is closely monitoring the cost of personal protective equipment (PPE). Since March 2020, the average national cost of PPE items increased 46 per cent. We will continue to monitor this situation and report changes as they arise.
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