The following is excerpted from an October 1, 2022 article by Rob Wile for NBC News Digital.
How inflation could impact the cost of rebuilding after Hurricane Ian
“If the hurricane had hit two months or three months earlier, it would have been so much worse than now,” one contractor said.
If there’s any consolation for survivors of Hurricane Ian, it’s that the rising cost of building materials has started to slow — and in some cases even reversed.
Thanks to a global economic slowdown, what seemed like a relentless increase in prices for materials over the past year or two had started to fade by the time Ian struck southwest Florida on Wednesday as a Category 4 storm.
The price of lumber, which surged during the Covid-19 pandemic and peaked in January, has returned to pre-pandemic levels, data from CME Group, a global markets company, show. It’s due in part to a sharp slowdown in construction as higher mortgage rates and higher home prices have taken hold.
Meanwhile, global shipping bottlenecks have eased, making more shipping containers available and reducing the cost of freight. Data from Drewry’s index, a global shipping tracking firm, show costs fell for 31 consecutive weeks, and have declined by 61% over the past 12 months.
“You’re not going to have to spend so much on flooring or kitchen supplies — right now [prices] are going down as we speak,” said Michelangelo Cocchiola, co-owner of Imeca Lumber & Hardware in Florida. “If the hurricane had hit two months or three months earlier, it would have been so much worse than now.”
Nationwide demand for houses has ground to a halt, said Brendan Lowney, principal of Forest Economic Advisors, a company that studies building costs. The run-up in prices has also caused producers of key commodities like lumber to expand production capacity, helping to cool off those price gains, Lowney said.
In addition to lumber, prices for other key homebuilding commodities like PVC (polyvinyl chloride) and copper are also reversing, according to market data.
The cost of materials “have come down substantially,” Lowney said.
But they are still elevated. The Bureau of Labor Statistics reported this month that prices for building materials had climbed 4.9% through the year-to-date, and were up 14.3% over the past year.