Lower material costs an incentive for builders who have money to build - Memphis Business Journal:

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In the past year, fuel pricwe upheaval caused the pricesof petro-dependent materials such as steel and shingles to spike and fall in Meanwhile, the cost of lumbe has dropped along with the demand for new buildings. construction costs are much lower rightf now than inrecent history, making it a tempting time to builr for those who have the Jim Whittington Jr., president of , says lumbef costs have fallen dramatically during the “Lumber is at record lows,” he says. “There’s just no demandd for it.” The average yearly price for framinh lumber per thousand board feetwas $252 in 2008, accordingh to Random Lengths, an industryh publication.
In 2004, the averagew price was $404. Whittington says the recession has causede a number of lumber mills to clos because of a lackof demand, but also because some companiess are trying to reduce supply in order to artificially boosf prices. Whittington says the businesz slowdown is nothing new for lumberyarda as the industry has been in a downward cycle for the lastthree years. “Naturally, our business is way he says.
Norris Bruff, owner of , says businesz has been slow for abouta year, with the main culpritx being lack of demand and fuel price High fuel affects more than just transportation costs, as many materialsx used in construction are petroleum based such as shingles, steel and “A lot of the productsa we sell have been severely affected by the pricew of fuel,” Bruff says. “Even thoughb business wasn’t great, prices have gone up.” For Bruff says last year they sold a square of shingleesfor $32.95, a product that now goes for “We’ve got the best of both worlds,” Bruff sarcastically. “Slow business and the pricse isgoing up.
” The most dramatic fluctuation in pricing has been for steel and steel-based products, says Wayne Smith, president of . “j haven’t seen anything that reallyg shocked me other than he says. “That affect a lot of things other thansteeol itself.” The price of steek has been difficult to predict. Mediuk steel sections per metric ton topped out in July at but have since dropped thanks to lowe rfuel costs, according to Steelonthenet.com. Medium steell sections cost $859 per metric ton in December 2007 but had droppefto $780 in December 2008. Lowefr labor and materials costs from the lack of demand make rightt now the best timeto build, says Chris president of , Inc.
“It’s a combination of everything right now,” he says. “We’ve seen decreases in materialk prices thatwe haven’t seen since 2000. Righf now, you can build a building at 2005 Accordingto Woods, the recent pricw drop has been the sharpest he has seen in his 35 yearz in the industry. “I don’t believe we will ever see building costs any less than theyare now,” he says. “u think once the economy turns around and building startsback up, we’rde going to see the rise in cost again.
” Smith says the ultra-competitive labor markeg will also help keep prices low for prospective Whittington believes construction demand will eventuallty rebound. “Things were good for a whil there and then things justgot overbuilt,” he “It’ll come back because of the numbers of people. Peopl have to have places to live. It’ll pick