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 more than 100 million 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 2018, Xactware observed changes to several material categories. The most significant change occurred in lumber material costs which increased 2.39 percent over the quarter and 19.92 percent since April 2017. We go into greater detail on lumber costs below.
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 1.38 percent cost increase in the first quarter of 2018 and a 4.94 percent cost increase since April 2017.
Xactware’s Pricing Data Services also surveys thousands of contractors across the country each month to determine what they charge for labor. The most significant change we observed occurred in the labor cost of a brick/stone mason, which increased 2.39 percent over the last quarter and 7.19 percent over the last year. The most significant annual change was seen in the labor cost of a drywall installer/finisher, which increased 8.51 percent since April 2017 and 2.23 percent over the last quarter.
The Retail Labor Index report tracks a combination of several common trades, including floor covering, painting, and roofing among others. In the first quarter of 2018, the index showed a 1.03 percent cost increase. Between April 2017 and April 2018, the index showed a 4.4 percent cost increase.
The combined labor 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 labor and materials makes up the majority of Xactware 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 0.99 percent in the first quarter of 2018 and a 4.57 percent increase since April 2017.
Fuel costs are extremely volatile and are a factor in item pricing. High oil prices can push down the price of some raw materials. Since April 2017, fuel prices increased 14.38 percent and 7.12 percent over the first quarter of 2018.
Xactware’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.
The drastic annual increase was caused by multiple factors including new import duties on softwood lumber from Canada and severe fires in British Columbia. These events decreased the lumber supply, driving up the cost in both the United States and Canada.
We looked at the percent change of costs for OSB sheathing, dimensional pre-cut stud, plywood sheathing, dimensional plate material, dimensional lumber, and treated dimensional lumber. The most significant annual cost change occurred in OSB Sheathing, which increased 47.09 percent since April 2017 and 5.83 percent over the first quarter of 2018.
While material costs increased in every state, Oregon, Idaho, Wyoming, and Washington had the highest lumber cost increases since April 2017.
Xactware is monitoring these factors and will continue to report any resulting pricing changes in future price list publications.
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 the United States or Canada, 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 labor 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 the United States and will vary from local prices.
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