The home improvement industry has not been immune to the effects of inflation. The current average costs for roof replacement are much higher than what we saw a few years ago.
Due to inflation and rising material costs, prices in the roofing industry have been skyrocketing and many individuals who need a new roof notice much higher price estimates than expected. In this article, we’ll explore the effects of inflation on roof replacement costs.
The market inflation rate in the USA is currently at 9.1%, which increases the commodity price index. The high inflation rate also impacts the roofing industry in various ways since construction material prices are 24.4% higher in 2022 than they were a year ago. Therefore, contractors face about three times price inflation, leading to a significant price increase over time.
Roofing Prices Across the USA
For individuals planning for renovations, including roofing, contractors need to ascertain that they charge about 15 to 20% more than what they charged a few years back. There are various reasons for the increase in roofing material prices, and there is a need to understand some of them.
Reasons Why Roofing Has Become More Expensive
In the wake of the covid-19 pandemic, there has been a significant delay in building products, be it shipping delays or labor shortages, causing suppliers to increase commodity costs. For instance, crude oil is a by-product of manufacturing roofing materials, and a comparison of crude oil prices years back indicates inflation. For instance, last year, crude oil sold below $50 a barrel, while currently, it costs $80 per barrel.
Additionally, the covid-19 pandemic also impacted various industries, and the roofing sector is not exempt. Roofing material costs were initially charged with a 60% markup, but this percentage rose to 67%. This markup cost is inflated, and generally, the markup for any industry needs to be about 40% or less to assist them in covering costs and attaining significant profits. Suppliers then respond by charging a high price on the roofing materials to increase profits. In response to the high commodity prices, manufacturers always peg it to the rising cost of oil and labor, among many other factors.
The Absolute Reason Why Roofing Is Expensive
As exhibited, inflation significantly contributes to the rise in roofing materials. However, people might perceive that manufacturers and suppliers are greedy due to market competition. The market has significant players who regularly raise their prices; hence contractors do not have much choice but to pay up and pass the cost to the consumer.
Lastly, this article aims at enlightening consumers on the increasing roofing costs in the market. It does not serve as a discouragement but an honesty pledge on the market situation of high prices. Inflation plays a critical center stage in the increase in roofing material prices. Therefore, do not shy away from replacing your roof due to the high prices and wait on a price drop. We can equate this market situation to the 2009 price jump, which saw less impact on price decrease on various commodities.
How to Save on Roof Replacement
The effects of inflation are all around us, but that doesn’t mean we can’t find ways to save. Having solar panels installed at the same as a roof replacement can help to reduce labor costs.
Contact us today if you’re interested in getting a new roof or preparing your roof for solar.