Verisk Industry Trends for 1st Quarter 2021
Xactware Industry Trends for 1st Quarter 2021
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 — 2021 - 1st Quarter
Materials
Material costs are highly variable and are sometimes impacted by factors such as fuel costs, changes to industry practices, or natural disasters. Verisk closely monitors a wide variety of material costs across the country to ensure its price lists reflect any recent changes to pricing.
In the fourth quarter of 2020, Verisk observed changes to six key material categories. While paint material had the largest quarterly increase of 1.47 percent, lumber material costs had the largest annual increase of 53.97 percent since January 2020.
The Material Composite Index report tracks a combination of several commonly used material components, including floor covering, paint, and roofing among others. The index showed a 0.12 percent cost increase in the fourth quarter of 2020 and 14.17 percent cost increase since January 2020.
Labor
Verisk’s Pricing Data Services team also surveys thousands of contractors across the country each month to determine what they charge for labor. The labor cost of a brick or stone mason had the highest annual percent change with a 17.8 percent increase, as well as the largest quarterly percent change with an 8.08 percent increase.
The Retail Labor Index report tracks a combination of several common trades, including floor covering, painting, and roofing. In the fourth quarter of 2020, the index showed a 1.62 percent cost increase. Between January 2020 and January 2021, the index showed a 7.9 percent cost increase.
The individual trades that contribute to the Retail Labor Index varied in their percent change over the quarter. The most significant quarterly change occurred in the labor cost of a brick or stone mason which increased 8.08 percent since October 2020.
Combined Trends
The combined labor and material report is based on monthly building cost data published by Verisk. It comprises a set of commonly used items and may be used as an indicator of trends within the marketplace. The combination of labor and materials makes up the majority of Verisk price list items. Tracking the percent change for the cost of these items provides a good gauge of the general market.
The Combined Labor and Materials report showed a cost increase of 0.7 percent in the fourth quarter of 2020 and a 9.09 percent increase since January 2020.
Fuel Costs
Fuel costs are extremely volatile and are a factor in item pricing. Low oil prices can push down the price of some raw materials. While fuel costs increased 3.69 percent during the fourth quarter of 2020, they have decreased by 12.76 percent since January 2020. Verisk’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.
Lumber
Since January 2020, lumber prices have dramatically increased by 53.97 percent in the United States. However, during the fourth quarter of 2020 lumber prices have begun to normalize and have shown a downward trend of 4.4 percent. Sheathing materials have shown to be more volatile and have also followed a downward trend of 5.12 percent from October 2020 to January 2021. Verisk is actively monitoring lumber materials and making warranted adjustments from focused surveys with suppliers for each monthly price list publication.
Personal Protective Equipment
Due to the current impacts of COVID-19, Verisk is closely monitoring the cost of personal protective equipment (PPE). Since March 2020, the average national cost of PPE items increased 42 percent. Verisk will continue to monitor this situation and report changes as they arise.
Where to Learn More
Annual Property Report
Verisk publishes annual property reports that focus on key trends during the previous calendar year. To order a copy of Verisk’s Property Report for the United States or Canada, please visit the Verisk Online Store.
Industry Trend Reports
Using Industry Trend Reports, Verisk customers can examine pricing trends on national, state or province, and local levels for key material and labor pricing changes in multiple trades. Trends can be viewed by the month or over extended periods of time. For more information about Verisk’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 Verisk’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 the United States and will vary from local prices.