Verisk Industry Trends for 2nd Quarter 2021
Overview
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.
Materials
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 first quarter of 2021, Xactware observed changes to six key material categories. Lumber material had the largest quarterly increase of 20.98 percent, as well as the largest annual increase of 84.71 percent 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 3.39 percent cost increase in the first quarter of 2021 and 15.16 percent cost increase since April 2020.
Labor
Labor
Xactware’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 concrete mason had the largest quarterly percent change with an 8.47 percent increase, as well as the highest annual percent change with a 13.58 percent increase.
The Retail Labor Index report tracks a combination of several common trades, including floor covering, painting, and roofing. While in the first quarter of 2021 the index showed a 1.86 percent cost decrease, between April 2020 and April 2021 the index showed a 3.84 percent cost increase.
In March 2021, the labor 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 labor 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 labor rate, it may be that the current retail hourly labor rate was adjusted downward to keep the unit price constant.
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 concrete mason which increased 8.47 percent since January 2021.
Combined Trends
Combined Trends
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 6.42 percent in the first quarter of 2021 and a 13.91 percent increase since April 2020.
Fuel Costs
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 costs increased 27.37 percent during the first quarter of 2021 and have increased by 48.49 percent since April 2020. Xactware’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.
Lumber
Since April 2020, lumber prices have dramatically increased by 84.71 percent in the United States. During the first quarter of 2021 lumber prices have continued to increase, showing an upward trend of 20.98 percent. Sheathing materials have shown to be more volatile and have increased 31.09 percent from January 2021 to April 2021.
