Updates On Lumber And Labor Costs For Builders

  • 5 min read

Today we’re going to talk about two major factors in the construction industry. One is materials and the other is labor.

First, we’re going to talk about the labor realities. One of the videos we did a few weeks ago had to do with labor costs and finding good help and there was a comment it was interesting from a viewer that said “what’s the matter you can’t find people that will work cheap for you?” kind of like an indictment of builders that maybe they’re trying to underpay. And maybe that’s the case. There may be builders that try to underpay and the implication was that you can’t find, what this person called “monkeys to work” for construction for a cheap price. And our experience, if you’re a builder you can tell us it’s actually the opposite, we can find plenty of what this person called “monkeys” I won’t use that term but, what most people would call kind of drone or kind of just, day labor types. We can find plenty of those. And our projects we pay $35-$50 an hour for entry-level construction workers. Medium skills. They’re not doing any kind of high-end craftsmanship or high-end contracting, or skilled labor, it’s more of just job site labor. Those are a dime a dozen. The problem is that first of all those people even at that rate will show up for a couple of days get some money and then not show up for a week. They needed that money for some bill or for whatever their lifestyle is and then they disappear. And even at that rate, those people are unreliable. They’re not performing well on the job site. They’re not taking directions well. The bigger problem is finding people that we want to pay more. We going to pay $80-$100 an hour for higher skill people you can just tell them detail mark this wall frame this file these construction plans. And in some cases, we’ve tried to elevate people up and give them the training to go from $45-$50 to $60-$70. And we tell them look you could be at $120-$130 an hour if you can get to this level and we’ll give them the training and they can’t get to that level. 

So those entry-level $35 to $50 an hour people that that’s not a problem finding them. Sometimes they don’t show up but even if they don’t there’s more that’ll come down the pipeline. It’s more about finding higher-skilled people. So that’s more of what the problem is and if you’re a builder and let us know what your experiences are with that. 

Now the other side of the cost equation is materials. Here is a report from a user that went to Home Depot, we don’t recommend big box stores for professional use just because a lot of times the services aren’t as good and the price isn’t really that great. But they found that there was a big change in price from 18 months ago and they loaded up their truck, and they spent about 800 bucks for a truckload which isn’t bad and a lot of the comments below reported the same thing. They also reported that they were having a tough time getting assistance from employees of the big box store. And this is something that we see a lot of you go to the store. You buy your products even at the pro desk and there’s nobody really to help you either source it or load it whereas if you go to, a local lumberyard or a pro distributor and they deliver right through. You tell them what your lumber materials list is they’ll price it out send you an invoice and they’ll deliver it. Or even if they don’t deliver if you need it right away, you can drive into the yard and they have people that will load it. 

So it may be that the lumberyards are having the same problem as builders finding people that are that kind of staff that can do kind of day labor or semi-skilled labor. But the lumber prices are down. We see that not down to where it was three-four years ago but it’s down from where it was a year and a half ago, which makes some of the project bidding a little bit easier but there is still some volatility and more importantly, there are some products that aren’t showing up. We are finding that the quality of a lot of the sticks isn’t as good. There are more knots, there are more cutouts. Not quite as clear span materials and sometimes it’s even created inspection permit problems. If there’s enough of a chunk removed in a stud wall, the inspector might not approve it. You might have to replace it with a clearer piece of stick. So let us know what your thoughts are in the comments and if this experience matches what you’re seeing in your neck of the woods.

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