If anything has remained constant in the local building market it’s been the prices.
According to local building supply companies the cost of materials for construction projects in the area is similar to their cost last year at this time – a sign that the industry itself is at least keeping ahead of the slowing economy.
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“It has been a relatively stable year,” said Ted Angell, owner of Sweet Lumber in Providence, which sells a variety of lumber for both residential and commercial building. “We may pay a little more for it in freight for West Coast lumber, but that’s to be expected.”
Dave Beattie, inventory manager and commodity buyer for the West Kingston-based Arnold Lumber Company, agreed that overall the year has been pretty stable, but said there have been drastic shifts along the way.
“In February and March we were at a ten-year low in terms of prices,” he said. “Then in June or July we actually had a couple of items break a record for the highest prices. Right now we are pretty close to where we were last year.”
Beattie said the high prices in early summer were the direct result of an increased tariff charge to Canadian mills shipping their products to the United States.
“There was a 19.3 percent tariff announced by the U.S. government on lumber coming from Canada,” he said. “This caused the Canadian mills to jump their prices by 20 percent. That spiked everything.”
But according to Beattie, the market drove the price of lumber down almost immediately.
“There wasn’t enough demand to support those prices,” he said. “The market is the market, and it sought the proper level of supply and demand. That’s what we ended up with.”
In October, Beattie said, the U.S. government leveled another tariff against the Canadian mills, but this time, the local lumberyards didn’t feel the effects.
“Canadian lumber mills are charged close to 32 percent in tariffs on their wood coming into the United States,” he said. “But we aren’t feeling it price wise.”
Arnold isn’t feeling what many have said is a slow down in the local building market either.
“Nationally, I think there has been talk of a slowdown, but we haven’t seen it,” he said. “If you look at the numbers for September, I think that was the first time there was actually a decline in the Northeast. People keep talking about it, but I don’t think it’s happened here yet.”
Eric Anderson, executive director of the Rhode Island Association of General Contractors, said that when the slowdown does hit locally, if it hasn’t already, the relationship between building supplier and contractors becomes even more important.
“Most everybody tries to maintain relationships because when things get tough that’s where you can get help,” he said. “Most contractors try and buy in large volumes so they get the lowest price. That becomes even more important in a slower economy.”
For Angell, bargaining with contractors and customers isn’t unusual.
“Bargaining is every day of the week,” he said. “That’s a constant in this business.”
But, he said, buying in bulk makes a big difference.
“When we make large purchases we can pass that savings on to our customers,” he said. “That’s definitely a benefit.”
Peter Mantia, sales manager for PRM Concrete in Pawtucket, agreed.
“The more yards that we buy, the less it is,” he said. “It’s that simple.”
Prices in the ready-mix concrete market have also been stable over the last few years, Mantia said, increasing on average about 5 percent a year.
“There have been a couple of dollar increments over the past few years, but it hasn’t been drastic,” he said. “The demand has been pretty stable, so it’s been good for us.”
A slight decrease in price is also being seen in the steel market. According to Robert Carley, manager of Providence-based J. Bloomfield and Sons, the cost of steel is directly related to demand, which has dropped slightly in recent months.
“The steel manufactures aren’t selling enough so they cut their prices,” he said. “The price has gone down a little – a couple of pennies a pound.”
Like the other material dealers, Carley said, buying in bulk is a huge benefit, both to him and his customers.
“If you are a higher volume dealer like we are, you see the benefits of buying in quantity,” he said. “We try to pass that on to our customer as often as possible.”
No one is quite sure what to expect in the coming months with winter being a typically slow building season and the economy still questionable. But, all agreed, they will be watching the market very closely
“We haven’t seen a drop seasonally yet, and that usually affects pricing,” Beattie said. “We are at levels now that continue to be historically low. I don’t think we will see that change anytime soon, but we will watch it carefully.”
“You never know what to expect,” Carley said. “You have to be ready for anything in this business.”
