Thursday, May 1, 2008

Market Prices

I received a letter today from a manufacturer of steel goods from which we buy products for polesheds and agricultural buildings. It stated that the cost of steel products would be rising next month on June 1st, by 20-35 percent, depending of the item. It blamed the rising prices on the costs of raw materials, energy, and transportation.

My first thought after reading this letter was, "Wow! A twenty percent increase in one shot." My second thought was, "Well, one more factor toward killing this economy." Add the rising prices of gas and food and we all ask, "When are things going to stop?"

But even with the rising prices of roofing materials and steel siding there is some good news to pass along. I recently needed to look up something in a ten year old estimate for a new house and discovered the current cost of lumber, drywall, and OSB sheathing is lower then it was back then.

You read that correctly. Today's prices on lumber and OSB are lower today then a decade ago. As I write this article, the price of a sheet of 1/2" OSB sheathing is a couple percent less then the price in 1998. The cost of 2x4's and 2x6's average out to be about fifteen percent lower today.

How long these lower prices will last is anyone's guess. With gas prices rising a couple times each week I would think the cost of lumber would also be rising. But then, the evening news anchormen keep talking about the housing market crisis so you know the demand for lumber and sheathing is down from a year ago.

What is the market going to be like in a month or year from now? I do not have a clue. And to tell the truth, I do not think the so-called economists know either.

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