Verisk Industry Trends for June 2022

Pricing research for the June 2022 publication shows that average costs for labor and materials United States in claims and remodeling showed slight increases in some key pricing components. Since June 2021, the Common Lumber Material report showed the largest decrease of 5.39 percent in Canada and 16.73 percent in the United States. The 30-yr. Laminated Shingle Labor and Material report showed the largest increase of 11.89 percent in the United States and 9.76 percent in Canada.

Since our May 2022 publication the Common Lumber Material report had a decrease of 6.55 percent in the United States and a 0.08 percent increase in Canada. The 30-yr. Laminated Shingle Labor and Material report showed the largest increase of 1.57 percent in Canada and 1.39 percent in the United States. Construction costs continue to increase as supply and demand, distribution, inflation, etc. continue to have an impact. It also continues to be a tight labor market and companies are competing to hire and keep quality employees.

All reported percent changes are based on the averages that have been reported either since the May 2022 price list publication or from June 2021 to June 2022. The information reported here is based on a national average, and it is important to note that actual changes will vary within each pricing market. It is also important to remember that Verisk’s published pricing information is based on recently completed surveys and estimate transactions.

For more information about these trends over a longer period of time, read the Quarterly Pricing Trends or the Annual Property Report.

Lumber Trend

Since June 2021, lumber prices have shown a decrease of 16.73 percent in the United States and 5.39 percent in Canada. Sheathing materials have followed a similar trend, showing a decrease of 25.74 percent in the United States and 8.85 percent in Canada since June 2021. As supply and demand for common lumber materials continues to change, Verisk will monitor these changes and make warranted adjustments from focused surveys with suppliers for each monthly price list publication. Lumber continues to be volatile with a trend in rising interest rates for home mortgages.

Since December 2021, rates for a 30-year fixed mortgage have sharply increased by 2.25 percentage points in the United States, increasing from 3.05 to 5.30 percent in the middle of May. However, from May 12th to May 26th rates have decreased 0.20 percentage points. Canada is also experiencing increased mortgage rates after largely decreasing since January 2019. Since July 2021 rates have increased 1 percent in Canada. Verisk will continue to monitor how this may impact the amount of new construction and remodeling projects that are in process.

Many other common construction materials are experiencing volatility as homebuyer demand increases, putting pressure on the cost of labor and materials. An estimated 5.24 million new homes are needed to satisfy homebuyer demand. Labor and materials shortages prompt new approaches to building and design, and with interest rates ticking downward after a sharp increase, it could drive the demand for new homes higher as homebuyers try to purchase homes before the mortgage rates increase further.

Local market conditions

Verisk makes every effort to ensure pricing information contained in this update represents market costs at the time of publication. Since actual market prices can vary and change rapidly, and many factors can affect the cost of a project (including, but not limited to: labor, equipment, and material costs as well as the rates and application of sales tax), we strongly recommend customers monitor their local markets for any such changes and adjust their estimate pricing as deemed appropriate.

Gasoline prices in the United States and Canada

Since the May 2022 publication, gasoline prices increased 11.83 percent in the United States and 11.76 percent in Canada. When compared to June 2021, gasoline prices have increased 52.10 percent in the United States and 50.90 percent in Canada.

Because gasoline prices can change rapidly, Verisk recommends estimators monitor their local costs to determine whether repair or construction costs are affected. For further details, see the United States Department of Energy website.

* Canada prices are per liter

Paint Shortage in United States

The raw material shortages caused by supply chain issues and high demand have affected the costs of many materials, including paint. Sherwin-Williams and PPG have stated the supply chain issues are making it difficult to manufacture products. The Paint Material Composite report for the United States shows that there has been an uptick in costs due to the shortage. The year-over-year change peaked at 13% in March of 2022, two years after the Coronavirus pandemic. From June 2018 to September 2021 the average yearly change was 4% while from October 2021 to June 2022 the average was 11%.

The supply chain issues and high demand caused by the pandemic aren't the only thing contributing to the shortage in paint materials. The Texas freeze in 2021 froze the production of petroleum, which is needed to make paint, and the export of resins was decreased due to limited production from Texas petrochemical plants. Hurricane Ida also impacted the production of paint as it caused a halt in the production of key chemicals and resins needed to make paint. Sherwin-Williams cut its outlook at the end of September 2021 for the second time in three weeks due to Ida's lasting impact on the supply chain. Verisk will continue to monitor supply chain issues, increased demand, and the affect they have on costs.

Top 200 Items Trend

Since the May 2022 price list publication the Top 200 Items by Total Spend showed an increase of 5.05 percent for Canada and an increase of 15.21 percent since June 2021. The United States showed a 2.93 percent increase since the May 2022 publication and an increase of 15.46 percent since June 2021.

The Top 200 Items by United States showed a 1.29 percent increase since the May 2022 publication for Canada and an increase of 8.89 percent since June 2021. The United States showed a 0.79 percent increase since the May 2022 publication and an 10.30 percent increase since June 2021.

The Top Items by United States represents the items that were the most used in claims coming through our system and the Top Items by Spend represents the items that had the highest total spend.

XactContents pricing update

Since the last price list update, the XactContents pricing team continued to improve the master item list in both the United States and Canada.

United States

Canada

Changes to the June price list

We added new items to the June price lists under the following categories:

• MTL (Metal Structures & Components) - Item and/or activity added for detaching & resetting metal roofing ridge cap.
• RFG (Roofing) - Item and/or activity added for detaching & resetting metal roofing ridge cap.
• SDG (Siding) - Items added for insulated vinyl inside corner post, outside corner post, and J trim.

Customers can view price list modifications on the eService Center. XactAnalysis customers can see this same report by selecting the Price List Changes report in the Industry Trend Reports.

Pricing feedback

Pricing feedback is one of the ways Verisk ensures that the reported cost information reflects actual market prices. Estimators writing estimates outside program work can return feedback by regularly running the feedback utility within Xactimate, XactRemodel, or XactPRM. Visit our web page for more information about submitting pricing feedback or check out our Xpert Tip on how to submit feedback in Xactimate.

More information

Verisk’s pricing database is the foundation for many of our products. You can download a price list in Xactimate and XactRemodel, or assign a price list in XactPRM.

For more information about managing price lists, click Help in any Verisk product.