by Don Magruder, CEO of Ro-Mac Lumber & Supply, Inc.
The Ro-Mac Lumber & Supply, Inc. Whole House Commodity Index (Index) for March 2018 increased 3 percent to $35,046.02, as tariffs and trade issues involving Chinese steel and Canadian lumber continue to angst the commodity markets. The surprise announcement caught many off guard, as they believed the threat of steel tariffs was being overblown. The 25 percent steel and 10 percent aluminum tariffs change the pricing dynamics of the residential housing market, because most products in the housing sector rely on imported steel and aluminum.
The Index for March is at a record high and there appears to be little signs of abating. Considering the following facts, the building supply sector is overheating, and the inflation demon is truly at play.
Although we are in the dead of winter, the inflation since the first of the year has rivaled any hurricane period.
In regards to this month’s report, the Index continued to increase over the last 30 days, and here are the notable movers since mid-February:
Substantial inflation has been seen in the building supply sector over the last 30 days, and there appears little momentum for lower prices anytime soon.
The steel and aluminum tariffs are not completely reflected in these costs, which is disconcerting. Even worse, real supply concerns are heightening every day. The sudden, unexpected announcement of tariffs by the President froze the import markets immediately and orders were cancelled by exporters. Because uncertainty remains as to which countries will be affected and the unknown retaliatory responses of countries being tariffed, the supply chain is broken. This may result in shortages of product later in the spring and summer.
Availability angst is growing with building supplies that depend on steel and aluminum. Certain foundation metal products have already become almost impossible to find and concerns about nails and fasteners are growing. Demand for metal roofing accessories has already stressed those supply chains and manufacturers are announcing immediate 25 percent increases with warnings of supply disruptions.
The price increases are coming and nothing barring a total collapse of the housing market is going to stop them. Builders should work with their vendor partners to plan needs and ensure adequate supplies are available when they need them. Allocations may come in certain sectors, and supply availability to customers may be dependent on prior buying histories.
Currently, the markets are in a highly inflationary period and the markets are extremely volatile. Now is the time to include a price adjustment clause in your contract. If you would like one based on this Index, please email Rebecca Ballash at
Builders today should update bids and be mindful of future project pricing. Just as important, communicate future needs with your suppliers. Now is the time when true business partnerships will pay the most dividends.
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