Aug 22 2008 8:23AM | Permalink | Email this | Comments (0) |
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Over the past few weeks I have been talking with a lot of building material manufacturers and have learned that their raw material costs have been rising at an unprecedented rate this year. This is particularly true with those products that utilize petroleum-based raw materials like roofing and vinyl siding and windows. Manufacturers of products that use metals like copper and steel have also experienced very high price increases. Obviously the manufacturers have been forced to raise their prices to home builders across the country.

The builders that I have talked to recently have verified that they are receiving price increases at an alarming rate and are scrambling to cope with this increase in cost. I have also been told that even though some builders have long-term pricing contracts with some manufacturers that there are clauses that void the contract are the manufacturer experiences unusually high cost increases.

All of this has put additional cost pressure on the builder in a time when he is trying to reduce costs and hold down his prices. Many of the builders I have talked to are down right upset with their suppliers but others understand the problems the manufacturers are facing. I urge builders and manufacturers to keep the lines of communication open and discuss each other’s situation and search for some kind of solution that works for both parties. This is critical that builders and manufacturers work together during these hard times as they will need each other when the market turns around.