British Columbia is a leader in providing quality wood exports to destinations around the world. In 2013, BC exported $5.8 billion worth of softwood lumber, pulp and other products with the US and China accounting for 75% of the export. Nonetheless, BC’s forestry industry is under raging fires and building and construction costs are being heavily impacted with increases of 10-40%.
While BC is not unaccustomed to wild fires spreading across the province, the problem with the 2017 fires is where they are located. Of the 5,000 square kilometers burned, over 70% is situated in the Cariboo region. Six of eight large wood producers have been shut down, either due to impending fire threats, or because their log supply has been cut off. The result is that there is simply not enough wood to go around.
In the last year, the cost of lumber has already increased by 30% due to home building in Canada and the US gearing up, and a lack of skilled labour. But in the last few weeks, there has been another 10% increase on lumber and up to 40% increase on sheeting material such as plywood and oriented strand board. Lead times which were previously three to five weeks are now unknown. For BC’s wood mills, these existing problems are being exacerbated by Mother Nature.
Normac stays up to date on current constructions costs by monitoring Statistics Canada and other local guides for any fluctuations. This way, we can adjust our Insurance Appraisals regularly to ensure accuracy so our clients’ assets are always sufficiently covered. Our research has shown that current costs are 6 – 7% higher than last year. While these changes are primarily due to increased demand for labour and materials from, the ongoing fires and lack of rain could cause construction costs to climb even higher.
To learn more about rising construction costs, read this article in the Vancouver Sun written by Andrew A Duffy.
At Normac, we are confident that our costs accurately reflect the current state of the construction market. We also believe that the recent changes underscore the importance of always having a current appraisal for every property. If you are interested in receiving a no obligation Insurance Appraisal quotation, please fill out Normac’s contact form here.