By Don Magruder
The March 2024 RoMac Building Supply Whole House Commodity Index increased a meager .1 percent to $51,127, but this slight increase is masking two market movers which could prove to be larger as the spring months bloom. Wood moulding prices jumped 9.4 percent for casing and 8.1 percent for base as shipping rates escalated because of the drought in the Panama Canal region and the ongoing disruptions in the Red Sea. Sea freight products could become more problematic as demand improves in 2024.
The other number being masked is the 28.4 percent increase in OSB sheathing since last month and the worry that OSB is under-manufactured with thin inventories in the supply chain. In the last 2 weeks, OSB sheathing has risen almost $3.00 per sheet, and this is starting to turn the CDX market, which had been weak and lost 8.0 percent in the last month. The recent movement in OSB and spruce indicates the markets are starting to gain some spring momentum and as the weather continues to warm and improve, so will pricing heat up.
Here are the other notable price movers on this month’s Index.
Foundation wire mesh dropped 12.6 percent and rebar dropped 2.0 percent on improved supply.
Pine lumber was up with 2x4 pine adding .6 percent, 2x6 pine increasing 7.1 percent, and 2x12 pine jumping 8.8 percent. Activity and stretched inventories are encouraging higher pricing.
Spruce dimensional is mixed with 2x4 spruce declining 3.0 percent while 2x6 spruce added 7.2 percent and 2x4 spruce studs increasing 4.3 percent. The trajectory for spruce is up and will improve as does housing starts.
Pressure-treated 4x4 posts were up 4.1 percent.
House wrap increased 3.0 percent and sill seal added 7.6 percent on increased manufacturing costs.
The other parts of the Index were flat but roofing shingle manufacturers are preparing for increases in April and May, and many believe trucking costs could increase with higher fuel and labor charges along with fruit and vegetable season in Florida.
Most believe 2024 will be a year of momentum. With each month, activity and pricing should firm. Builders should be wary of using today’s prices for mid-summer projects, and now is a good time to dust off price escalation clauses in contracts. A $3 increase in OSB in a couple of weeks is reason enough to understand these markets can turn fast.
Have a wonderful and blessed Easter!
The RoMac Building Supply Whole House Commodity Index is based on wholesale costs of the base components to build a 2,200-square-foot wood frame home with a concrete stem wall in Central Florida. The Index includes foundation, metal, concrete, block, stucco, cement, wood framing, siding, sheathings, trusses, roofing, drywall, insulation, windows, doors, trim, garage doors, and most building hardware. It does not include décor, electrical, plumbing, mechanical, landscaping, or labor. Because the Index uses current wholesale costs, this should be a strong indicator of the direction of building prices for the next 30-45 days.
Don Magruder is the Chief Executive Officer of RoMac Building Supply in Central Florida.
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