What a difference 8 years can make.
I had conversations with a couple of our Midwest customers this week, and it seems everyone is asking me the same question: What’s happening with pricing? My response is that prices will continue to rise, unfortunately.
If oil and other commodities were not where they are today, we would have inflation similar to what we experienced before the financial crisis. You can look at line graphs jumping up over at ENR.
When asked why the cost increases, my answer is pretty simple. Nothing stays in balance. Right now there’s larger demand than there is supply of material vendors and subcontractors. My nonscientific guess is that there are about 30% less resources in each category. This will change over time, but right now the demand is outstripping the supply. As a contractor, I feel like things in 2015 seem eerily similar to 2007 in many ways. Hopefully we have learned from the last cycle, but nothing lasts forever.
