Verisk Industry Trends for 4th Quarter 2021
Verisk Industry Trends Bulletin Key Pricing Trends
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 - 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 2021, Xactware observed changes to six key material categories. Lumber material had the largest quarterly change, showing a decrease of 22.51 per cent. However, lumber also had the largest annual increase of 35.86 per cent since October 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 6.02 per cent decrease in the third quarter of 2021 and a 10.92 per cent increase since October 2020.
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. While the most significant change observed in key labour categories occurred in the labour cost of a flooring installer, which increased 5.21 per cent over the third quarter of 2021, the labour cost of a siding installer had the largest annual increase at 25.57 per cent since October 2020.
The Retail Labour Index tracks a combination of several common trades, including floor covering, painting, and roofing. In the third quarter of 2021, the index showed a 1.47 per cent cost increase. Since October 2020, it showed a cost increase of 4.48 per cent.
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 flooring installer, which increased 5.21 per cent since July 2021.
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 valuable gauge of the general market.
The Combined Labour and Materials report showed a cost decrease of 2.47 per cent in the third quarter of 2021 and a 13.29 per cent increase over the year.
Fuel Costs
Fuel costs are extremely volatile and are a factor in item pricing. High oil prices can push up the price of some raw materials. Fuel prices have decreased 0.90 per cent over the third quarter of 2021 and have increased 31.80 per cent since October 2020. Xactware’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.
Lumber
Since October 2020, lumber prices have increased by 35.86 per cent in Canada. During the third quarter of 2021 lumber prices decreased 22.50 per cent. Sheathing materials have shown a similar trend and have decreased 21.05 per cent from July 2021 to October 2021.
The Basket of Goods reports are also a good indicator of the impact that lumber costs have had on market pricing. Since October 2020, the Basket of Goods Labour & Material report has shown an increase of 13.29 per cent. When framing components are removed from this basket of goods, the report shows an increase of 11.83 per cent.
Since October 2020, the Basket of Goods Material report has shown an increase of 10.92 per cent. When framing components are removed from this basket of goods, the report shows an increase of 7.64 per cent.
Xactware is continually 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, Xactware is closely monitoring the cost of personal protective equipment (PPE). Since March 2020, the average national cost of PPE items increased 51.1 per cent. Xactware 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.