The past year has brought an unusually high number of natural disasters to the U.S. Between wildfires in the West and a trio of hurricanes causing widespread destruction in Texas, Louisiana, Puerto Rico and other areas, many homeowners are left with houses badly needing repairs or complete rebuilds.
As with any other in-demand commodity, the increase in need for items like lumber, siding, shingles and drywall will also increase the cost. Here's what dealerships should know:
This trend will be present all over the U.S. - not just where hurricanes or wildfires have hit, Remodeling magazine pointed out. Customers will see a price increase of at least 2.7 percent on some of the most common professional remodeling jobs compared with prices in 2016, with some projects increasing as much as 6.5 percent in cost.
These price increases were calculated before hurricanes Harvey, Irma and Maria made landfall, Remodeling pointed out; these natural disasters are likely to increase costs even more, Barron's reported.
"In the second half of the three major hurricane years this century - 2005, 2010, and 2013—lumber futures increased about a third in price on average," Will Rhind, CEO of GraniteShares, which offers a suite of commodity-based exchange-traded funds, told Barron's.
For many years, softwood lumber from certain parts of Canada was exempt from tariffs, according to U.S. News & World Report. That changed, inconveniently, just months before the hurricanes struck.
Most lumber companies in Canada had been paying a 26.75 percent anti-dumping tariff, with some paying as much as 30 percent, according to CBC News. Now, with duties lowered to just 6.87 percent, Canadian companies may be pleased to save money on exports.
Now, with businesses working hard to help their communities rebuild and the demand for lumber suddenly increased, the lowered tariff can work to U.S. companies' favors. Several U.S. politicians spoke out against the tariffs, including Maine Governor Paul LePage, stating that pausing them will help families rebuild, U.S. News & World Report explained.
As costs continue to increase on necessary materials like drywall and lumber, your business will need to increase prices accordingly. Be honest and upfront about pricing changes with your customers. Some may feel put off about the increased costs for their home renovation, so it's important to answer any questions they may have, such as why prices are increasing or how they can make the home renovation project more affordable.
Offering a financing program can help ease your customers' cost-related concerns. To learn about how you can provide a financing program that can benefit your customers, connect with Aqua Finance.