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.
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 2021, Xactware observed changes to six key material categories. Lumber material had the largest quarterly increase of 18.10 per cent, as well as the largest annual increase of 69.51 per cent since April 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 2.83 per cent increase in the first quarter of 2021 and a 13.05 per cent increase since April 2020.
Xactware’s Pricing Data Services team also surveys thousands of contractors across the country each month to determine what they are charging for labour. While the most significant change observed in key labour categories occurred in the labour cost of an electrician, which increased 0.89 per cent over the first quarter of 2021, the labour cost of a siding installer had the largest annual increase at 13.60 per cent since April 2020.
The Retail Labour Index tracks a combination of several common trades, including floor covering, painting, and roofing. In the first quarter of 2021, the index showed a 1.38 per cent cost decrease. Since April 2020, it showed a cost increase of 3.69 per cent.
In March 2021, the labour supporting events time assumptions for drive time and material/equipment pick up were adjusted from 30 minutes to 60 minutes. This adjustment was based on a recent focused survey conducted with a large group of contractors in multiple states and provinces. The impact on unit pricing and hourly labour rates varied based on feedback and recent random sample surveys. For example, in some trades where it is more common for contractors to quote a unit price over an hourly labour rate, it may be that the current retail hourly labour rate was adjusted downward to keep the unit price constant.
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 a carpenter - mechanic which increased 1.70 per cent since January 2021.
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 5.80 per cent in the first quarter of 2021 and a 12.85 per cent increase over the year.
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 increased 18.83 per cent over the first quarter of 2021 and have increased 63.81 per cent since April 2020. Xactware’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.
Since April 2020, lumber prices have dramatically increased by 69.51 per cent in Canada. During the first quarter of 2021 lumber prices increased 18.10 per cent. Sheathing materials have shown to be more volatile and have increased 27.29 per cent from January 2021 to April 2021.
The Basket of Goods reports are also a good indicator of the impact that lumber costs have had on market pricing. Since April 2020, the Basket of Goods Labour & Material report has shown an increase of 12.85 per cent. When framing components are removed from this basket of goods, the report shows an increase of 7.45 per cent.
Since April 2020, the Basket of Goods Material report has shown an increase of 13.05 per cent. When framing components are removed from this basket of goods, the report shows an increase of 1.71 per cent.
Xactware is continually monitoring lumber materials and making warranted adjustments from focused surveys with suppliers for each monthly price list publication.
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 45.91 per cent. Xactware will continue to monitor this situation and report changes as they arise.
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.