Good evening, good people.
I just want to give some advice to those of you who are in the starting blocks for purchasing materials for a larger project.
In my professional role, I have good insight into purchasing agreements for all building supply stores in the country. I can mention some announced price increases, but generally, most things will rise sharply.
Reinforcement steel - up 12%
Total increase of 35% since last fall.
Shortage of steel globally, China is paying incredibly well right now.
Structural timber (C24) - up 15%
Total increase of 40% since last fall.
Shortage due to closed sawmills at the start of the pandemic, bark beetle, and wet ground in the forest. The USA pays double for a cubic meter of pine, so it's profitable to ship it off.
OSB - up 20%
Will rise further for another month, then the forecast is that all building supply dealers will have emptied their stocks, and it will be over.
It will come in periodically from April onwards, but the price level is expected to remain.
Plan instead with plywood, chipboard, raw boards, or extra hard plasterboard.
Other sheet materials - up 10 - 20%
Due to the shortage of OSB, there will be a scramble for other wood-based sheet materials on the market.
So in other words, the cost of materials for a stick-built house may rise by about 10-20% compared to calculations made last fall. As it stands now, it could differ by 5% from one week to the next.
My advice is to start now and secure orders without the construction firm or supplier having the right to adjust, or wait until the fall to see if the situation has calmed down.
I just want to give some advice to those of you who are in the starting blocks for purchasing materials for a larger project.
In my professional role, I have good insight into purchasing agreements for all building supply stores in the country. I can mention some announced price increases, but generally, most things will rise sharply.
Reinforcement steel - up 12%
Total increase of 35% since last fall.
Shortage of steel globally, China is paying incredibly well right now.
Structural timber (C24) - up 15%
Total increase of 40% since last fall.
Shortage due to closed sawmills at the start of the pandemic, bark beetle, and wet ground in the forest. The USA pays double for a cubic meter of pine, so it's profitable to ship it off.
OSB - up 20%
Will rise further for another month, then the forecast is that all building supply dealers will have emptied their stocks, and it will be over.
It will come in periodically from April onwards, but the price level is expected to remain.
Plan instead with plywood, chipboard, raw boards, or extra hard plasterboard.
Other sheet materials - up 10 - 20%
Due to the shortage of OSB, there will be a scramble for other wood-based sheet materials on the market.
So in other words, the cost of materials for a stick-built house may rise by about 10-20% compared to calculations made last fall. As it stands now, it could differ by 5% from one week to the next.
My advice is to start now and secure orders without the construction firm or supplier having the right to adjust, or wait until the fall to see if the situation has calmed down.
Valuable info for many, thankful that you share. Clearly difficult to say, but do you assess that it is a short-term peak (1 year) or is it a new price level generally?
We have had comparatively lower prices in Sweden, but now we are starting to catch up. So some of the increases are likely to remain. Much of this is due to a shortage of raw materials or unfortunate coincidences of various factors. My personal guess is that it will calm down towards the fall and possibly decrease slightly thereafter.
A bit more info on released price notifications for other building materials. Usually, they are around 1-2% but this year at 2-6% depending on the product category, so not too bad in other words. The two extreme groups seem to be wood and steel with some exceptions. However, the retail wholesalers are experiencing significant delays, which might not affect private carpenters much other than that it can be difficult to get hold of certain power tools depending on brand and country of manufacture.
Do you have any theory on timber prices during the year and how this has looked historically? I think it's easier to raise prices than to then go back and lower them. If prices increase by 20% now, I find it hard to see them returning to the current level in the fall or next year, possibly they might go down a bit, say 10% but it doesn't feel like they will go back to the same as it was before?
Well, the future is always hard to predict. I also don't think we'll return to the same low levels; however, as you said, we will surely see a decline, but whether it will be 5, 10, or 15% is hard to say. Everything is governed by supply and demand. What could cause prices to drop in 2022 would be if exports decreased due to changes in trade regulations and taxes with the USA, UK, and EU, or if we had a surplus of material again due to something like severe autumn storms.D Drojn said:
Sweden's timber cultivation areas are increasing every year but not at the same pace as demand. It's still in its infancy as the world is rapidly transitioning to sustainable building, where timber is expected to play a major role.
What I hope will happen as a reaction is that "small forest owners" become fed up with the big sawmills continuing to buy cheaply but sell expensively. That we will see a development where smaller local players with sawmills start to pop up where forest owners get better compensation for their timber, and we as customers can even buy slightly cheaper and definitely more sustainable material.
Completely agree. It's impossible to predict the future. Things never turn out as you expect. It's unfortunate, though, that when you're planning to build a house and just about to collect quotes, everyone has raised their prices since just a week ago...E EI30-SaC said:
It's unfortunate that we weren't a month earlier in the process, it sucks to just start receiving quotes now in April when the price increase has occurred. One wonders if this will ease in a few months, but as you say, the same low levels we will probably not return to.E EI30-SaC said:Yes, we are actually in the same boat, waiting for a contract to be able to sign for a new build, unfortunately, it is taking time and the total price/final price is just ticking on
When the US has calmed down, it will surely go down, however, I don't think the entire increase will go down.D Drojn said:
It remains very uncertain, with rising prices and uncertain delivery notices. I've heard of some product categories where quotes are valid for 24 hours.D Drojn said:
Unfortunately, another side effect has emerged, which is that poorer qualities are being allowed through in production compared to before, mostly concerning timber products.
Our intended future home suddenly became 500,000 :-- more expensive and the move-in was postponed by 10 months before contract signing. I assume it was some type of risk assessment by the contractor, but it wasn't something we wanted to pay for, so that dream fell through at the last moment...