By Don Magruder
The Ro-Mac Lumber & Supply, Inc. Whole House Commodity Index (Index) continues to be stuck in a range that is below the level of August 2015. The March increase of 0.6% to $29,639.90 might be the first sign that pricing is ready to go up or it could be just a seasonal springtime adjustment. One thing is for sure, the momentum in commodity pricing that occurred in most of the spring seasons since the Great Recession did not translate into full-year price increases. Depressed fuel prices and subdued housing demands could result in another springtime pricing repeat.
The following are the notable price movers in the Index since mid-February:
As with most spring seasons, prices generally move up. Thus far, the increases have been somewhat tempered—there is no heavy run-up as in busier years. April and May will be good indicators if these markets have legs to run. Builders should update quotes and probably pad material for projects later in the year. This is a good time to keep close to your building supply professional and dust off your price escalation clause in your contracts.
The Ro-Mac Lumber & Supply, Inc. Whole House Commodity Index is based on wholesale costs of the base components to build a 2,200 square foot wood frame home with a concrete stem wall in Central Florida. The Index includes foundation, metal, concrete, block, stucco, cement, wood framing, siding, sheathings, trusses, roofing, drywall, insulation, windows, doors, trim, garage doors, and most building hardware. It does not include décor, electrical, plumbing, mechanical, landscaping, or labor. Because the Index uses current wholesale costs, this should be a strong indicator of the direction of building prices for the next 30-45 days.
Don Magruder is the Chief Executive Officer of Ro-Mac Lumber & Supply, Inc. in Central Florida. Go to www.romaclumber.com to sign-up for the Index and other free market reports. To sign-up for this information via email, contact Rebecca Ballash at