Verisk Industry Trends for 1st Quarter 2022

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 fourth quarter of 2021, Xactware observed increases in six key material categories. Paint material had the largest quarterly increase of 2.91 percent, and interior trim material had the largest annual increase of 26.57 percent since January 2021.

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 2.15 percent cost increase in the fourth quarter of 2021 and 7.50 percent cost increase since January 2021.

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 Siding Installer had the largest quarterly percent change with a 4.00 percent increase, while the labor cost of a Concrete Mason had the highest annual percent change with a 13.18 percent increase.

The Retail Labor Index report tracks a combination of several common trades, including floor covering, painting, and roofing. In the fourth quarter of 2021 the index showed a 2.59 percent cost increase, and since January 2021 the index showed a 5.30 percent cost increase.

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 valuable gauge of the general market.

The Combined Labor and Materials report showed a cost increase 1.98 percent in the fourth quarter of 2021 and a 12.10 percent increase since January 2021.

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 3.00 percent during the fourth quarter of 2021 and have increased by 46.00 percent since December 2020. Xactware’s Pricing Data Services carefully tracks fuel costs to ensure accurate pricing.

Lumber

Since January 2021, lumber prices have increased by 9.80 percent. During the fourth quarter of 2021 lumber prices have continued to increase, showing an upward trend of 0.85 percent. Sheathing materials however have decreased 4.90 percent from October 2021 to January 2022. 

The Basket of Goods reports are also a good indicator of the impact that lumber costs have had on market pricing. Since January 2021, the Basket of Goods Labor & Material report has shown an increase of 12.10 percent. When framing components are removed from this basket of goods, the report shows an increase of 13.21 percent.

Since January 2021, the Basket of Goods Material report has shown an increase of 7.50 percent. When framing components are removed from this basket of goods, the report shows an increase of 10.42 percent.

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 40.12 percent. Xactware will continue to monitor this situation and report changes as they arise. 

Kentucky Tornadoes

On December 10^th, multiple tornadoes moved through several states, destroying thousands of homes and structures according to Kentucky governor Andy Beshear. The strongest, an EF-4 rated tornado, struck western Kentucky and traveled 165 miles. Storm surveys found that the tornado began in far northwest Tennessee, and moved across western Kentucky, resulting in significant destruction to portions of the region and had winds as high as 190 mph according to the National Weather Service. Another EF-3 rated tornado touched down in Bowling Green causing further destruction as it traveled 122 miles and had winds as high as 160 mph. As of the end of December the death toll totaled 77 making this weather event the deadliest in the state’s history.

Estimates filed through Xactimate had a large increase in volume from November to December following the Kentucky tornado event. The total number of estimates filed in the three most western Kentucky price list areas increased 698.00 percent from November to December, while the rest of Kentucky increased 22.00 percent. Bowling Green had the largest increase at 863.60 percent, followed by Paducah at 788.50 percent, and Owensboro at 362.90 percent.

As with any catastrophe or storm, Xactware’s pricing team will continually monitor price changes in areas impacted by this storm event to help determine how local pricing may be affected.

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 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.