With so much uncertainty around lead times, product availability and price increases, I thought it wise to give you an update on how Bretts sees the current market and more importantly, what the next twelve months looks like. Put simply, it very much seems like more of the same for the foreseeable future in terms of price increases and sporadic unreliable supply.
So by all means please make sure you have rise and fall provisions in your contracts.
Today alone, I have received advice of increases in September of 30% & 40% respectively for imported timber I Beams and framing. Obviously no one can afford to absorb such increases, so the additional cost has to be worn by the end user.
Please be aware that our quotes are only valid for 30 days and that all significant price increases have to be passed on.
Pine Framing – we’ve seen some slight easing in availability over the past couple of weeks, as local sawmills start to catch up and importers finally get their hands on some wood, albeit at significantly higher prices. We envisage stock levels remaining similar to the present situation until around October, when we normally see a reduction in imports, as a result of the traditional July (Summer) mill closures for maintenance. We expect another round of price increases in September/October in the order of 20-30%, so make sure you keep that in mind when quoting.
Floor Systems – if anything, supply is getting worse not better, as Australia’s only local manufacturer (Wesbeam) struggles to keep up with demand. Tilling & Dindas continue to struggle to get stock as a result of the increased demand in the US, exacerbated by the global shortage of shipping containers stifling shipping. Like framing, we expect another round of price increases in September/October in the order of 20-30%, so make sure you keep that in mind when quoting.
Timber Frame & Truss – for some time now, we have been listening to stories from competitors about closing their order books for 2021. Unfortunately, it looks very much like we are almost at that point ourselves, as we have been inundated with orders over the past 5 months. Our average monthly intake has increased by almost 50% over the normal average and whilst we would love to increase production to meet that demand, there simply isn’t enough framing available to do so. With current lead times pushing 20 weeks, you would also be wise to allow an additional 2-3 weeks in your scheduling, just in case we can’t get the timber in the right grade and length.
Steel Frame & Truss – not surprisingly, Bluescope have taken advantage of the bullish market conditions and inflicted a 30% increase in coil pricing which takes effect from the 1st July. Steel is not suffering the same issues with regard to supply, so we shouldn’t see sporadic supply issues, nor the quarterly price increases we’ve seen with timber. Having said that, we are still heavily constrained by Detailing bottle necks, as we struggle to hire new/train up existing staff to meet the demand surge. At this stage we are advising customers of 12 week lead times for supply & installation of steel Frames & Trusses.
Doors & Windows – remain relatively unaffected by the building boom, so price increases have been kept to a minimum, however lead times are now starting to balloon as order intake starts to catch up to the Frame & Truss order book. We are currently quoting 4-6 weeks for supply of traditional AWS product.
Building Materials & Hardware – hardware & building materials have been less impacted than timber, but we are still seeing intermittent supply issues, as excessive demand across the country puts pressure on supply chains. We expect to continue seeing single digit price increases every 6 months on most categories, so make sure you factor that in when quoting.
I wish I could be more specific about the timing and size of the price increases, as well as lead times on production. I can’t stress enough, how important it is to ensure that you have rise and fall provisions in your contracts and to add in a couple of weeks of “fat” in every job, to take account of the inevitable delays that you will face, as every link in the building industry supply chain get stretched to breaking point.