If you operate in the building industry (and even if you don't), you're likely well aware of the steady increase in product prices over the past year. Chances are, you've heard about them from a customer's point of view: They can't afford to finish a project they started last year, or their contractor is fresh out of a certain material that's crucial for the job.
On the other side of the coin, the Home Improvement Research Institute was interested in the perspective of contractors and other professionals dealing with these same price increases. How bad is it on their end? How are they dealing with the additional costs? When do they expect things to go back to normal?
This February, HIRI administered an online survey to 560 respondents across various construction and remodeling trades to achieve just that. What we learned was not a complete shock, but rather a confirmation of the difficulties many in the home improvement industry have recently faced.
An overwhelming 93% of professional contractors reported that their material costs have increased in the last six months. For those who saw increases, the average hike was 19%. Unsurprisingly to those in the field, lumber and plywood have been the most common materials to increase in price, but other building materials follow closely behind.
HIRI also asked pros how they or their companies have handled price increases. While some pass along this burden to their customers, the majority are absorbing at least some of the costs, cutting into profit margins. Meanwhile, many of those passing the increases along to their customers reported a detrimental impact on their business. More than half (57%) responded that they lost bids due to price increases.
On the bright side, with the current demand for contractors so high, most pros do not find themselves in immediate risk of losing jobs due to price increases. However, when asked about future prices, the majority of pros answered that they expect prices to be even higher in six months.
This data was pulled from HIRI’s quarterly Contractor Survey, which polls professional contractors on the trending topics of the day from effects of COVID to labor shortages to digital business trends. To read the entire report and for instant access to updates as they are released, join HIRI today.