Kim Drew, a spokeswoman for the Southern Pine Council, says that the members of that organization are still assessing the situation and haven’t yet determined what, if any, measures they’ll take in anticipation of increased demand. However, she concedes that ramping up production “is a very logical next step.”
There was a bit of a buzz when the storm first hit about production being affected. However, REMODELING could not find any confirmed reports of facilities sustaining heavy damage. The extent of damage to ports in the Gulf will also factor in materials shortages and price hikes.
Whatever happens, remodelers should be able to deal with the consequences of the disaster as long as they plan accordingly. That means talking to your vendors, says Dett Otterbeck, a remodeler in Schodack, N.Y. “We’re asking them to keep us in mind,” Otterbeck says. “That way, we can figure [increases] into the stuff coming up.”
Be sure to talk to vendors about the possibility of an added fuel surcharge or delivery charge in the near future. Already high, gas prices soared — to as much as $5 per gallon in some areas — immediately after the storm, and although they have settled some, they’re still at an all-time high and have increased by more than 40% during the past year. Otterbeck says that both of his local lumberyards and his concrete supplier are contemplating charging for fuel or delivery to combat rising gas prices, and the president of a chain of lumberyards in northern Louisiana says he’s considering the same thing. High fuel costs could affect materials prices due to shipping charges (the price of diesel fuel rose 30 cents in the week ending September 5, according to the Department of Energy), and petroleum-based products such as roofing shingles and vinyl siding could also rise in price.
Otterbeck also warns of employees looking to be reimbursed for gas costs going to and from jobs. For now, he’s been giving his field crew gas cards. “It’s not in our budget, so it’s going to come out of our profit margin,” Otterbeck says, adding that he will start building these costs into job prices.
Labor. Labor may actually be the biggest problem. Contrasting it with materials supply, Baker says “there’s not much give in the system. Remodeling is not an industry where you see [significant] gains in productivity.”
In the short term, there may be a labor glut as evacuees from the Gulf Coast relocate. Jeb Breithaupt, a remodeler in Shreveport, La., six hours northwest of New Orleans, says he’s already had several people come to him looking for jobs. “We’re going to push hard on the accelerator to sell a lot this fall,” Breithaupt says, since his production capacity will be greater as a result of his larger workforce.
However, Breithaupt himself admits that he’s planning for a labor drain once rebuilding starts and construction jobs become plentiful. “There are not enough qualified, capable contractors to complete all of the work in a span of time that will be deemed acceptable by residents,” says Dale Sailer, president of Disaster Kleenup International, a large insurance restoration chain. “The capacity doesn’t exist.” Unlike hard goods, skilled labor can’t be produced upon demand. “You can’t create a fully qualified technician in 48 hours,” Sailer says.
Ultimately, Baker says, it will boil down to this: What will the national economy be like then?
The economy. Baker’s question is a good one. A rise in gas prices is never good for the economy, although quick repairs to fuel pipelines and President Bush’s decision to release some of the Strategic Petroleum Reserve seem to have halted any further increase.