The last couple of years have been an estimator’s nightmare. We often price jobs several months in advance, and we all know that the trajectory of pricing has been angling up. By the time we get around to building a project, that preliminary pricing is often obsolete.
I asked our estimating team for a State of the Union style briefing and thought the high points were worth sharing. First, the not so good:
- Fabricated steel was still increasing in 4Q of ’21.
- Bar joist & deck prices are up almost 200 to 300% in some cases, probably due in part to the extraordinarily large quantity of distribution center projects at the present. Lead time for shop drawings and delivery is +/- 6 months.
- Roofing contractors are telling us upwards of 10 months for roofing materials. One prominent roofing contractor said there are presently 50% more roofing material orders in the system than manufacturers can supply for 2022. At the same time, placing orders for materials will give you a slot, and will be easy to transfer if needed, particularly with insulation.
Here is some better news, “cracks in the ice” as we call it:
- Last week, we priced a project where one fabricator sent us a quote, then followed-up with another, lower price a few days later. Sometimes it only takes one supplier to initiate a correction, up or down.
- Another fabricator mentioned they had received delivery of off-shore steel materials for the first time in more than 2 years, which could help the strained steel market.
- Yesterday morning, I was with a normally very busy subcontractor. For the first time in a year or so, he said he was going to have to start chasing jobs again.
I also believe that expectations of high inflation can be self-fulfilling at times. There is always the concern that expectations of inflation over the long haul become “unanchored.” Hopefully, supply chains and other parts that make up the market will stabilize and readjust. Beyond all, we are always looking for ways to be creative for our customers.