Oct 3, 2004 By Steve Ferris 4 min read

Rebuilding efforts after hurricanes and other disasters historically have driven up the demand and the price for lumber and other building materials. But, local building material suppliers and contractors have different opinions about the effect this year’s hurricanes in the South have had and will have on prices and availability here and in other parts of the country.

Chris Cluss of O.C. Cluss Lumber Co. in Uniontown said hurricanes that hit Florida and other southern states have had some effect, but demand from overseas has had more of an impact.

Chris Ahearn, a spokeswoman for Lowe’s, said the hurricanes are not causing supply shortages or price increases at its national chain of stores.

But, Patsy Marano, district general manager for Bastian Homes, said he believes the South will run into shortages of lumber and other materials when residents and business begin rebuilding, and that could affect prices and supplies locally.

All agree that prices for lumber this year are higher than they were last year.

Around the middle of this year, Cluss said, the price of building construction commodities was 35 to 40 percent higher than last year.

He said a large demand for building materials in Japan and China created a shortage in the United States, and that shortage translated into higher prices domestically.

“Prices this year have been totally inflated. They’re finally starting to drop,” Cluss said. “Florida is a big deal, but the economy in China and Japan is even bigger.”

The price of a home built this year could cost as much as 25 to 30 percent more than the same home built last year, due to higher material costs, he said.

Those higher costs hurt contractors who scheduled and signed contracts for jobs before the prices rose, Cluss said.

Low interest rates for home construction in this country was another factor, but recent rate hikes have reduced demand, he said.

“As interest rates go up, demand comes down and prices go down. Low interest rates make people want to build,” Cluss said.

He said supply has started to catch up with demand, and prices have fallen over the last few weeks.

Bastian Homes, which buys most of its materials from Cluss, is among the contractors likely to benefit from the lower prices.

“If prices rise after we sign a contract, we’re locked in,” said Marano.

He said lumber prices were 10 to 20 percent higher this year than they were last year.

Marano said he believes demand will increase for all building products in Florida and that will make them less available here.

“Once they start rebuilding, there is going to be a tremendous shortage down there,” Marano said. “I’m sure they’re buying all they can get their hands on. They’re going to be doing a lot of remodeling and rebuilding in Florida.”

He said if material prices for a house rise less than $2,000, Bastian passes the increase along to the customer, while the company absorbs larger increases.

Bastian has operations in five states and builds about 30 homes a year out of its Uniontown office, Marano said.

Lumber accounted for 9 percent, or $2.6 billion, of Lowe’s $3.8 billion in total sales in 2003, Ahearn said.

“We’re really not seeing an impact on lumber prices as a result of the hurricanes,” Ahearn said. “Lumber prices are up over last year’s prices, but that is because of an increased demand due to the summer building season. That put some pressure on supply.”

Ahearn said Lowe’s has long-term contracts established with lumber suppliers and has not had a problem obtaining the quantities needed to stock its stores.

Prices and supplies of other building materials also have not been affected by the hurricanes, she said.

There was a shortage of generators, Ahearn said, due to huge demand from people who lost power in Florida.

The company freezes prices where states have issued emergency declarations due to hurricanes or other disasters.

“We freeze prices in markets in a state of emergency. We always do that so customers can be assured they’re going to get a fair price and there are no questions about price gauging,” Ahearn said.

The price freezes are lifted when states lift their emergency declarations, she said.