Rising Prices for Pros Hero 2

How Professional Contractors Are Dealing with Price Increases

If you oper­ate in the build­ing indus­try (and even if you don’t), you’re like­ly well aware of the steady increase in prod­uct prices over the past year. Chances are, you’ve heard about them from a customer’s point of view: They can’t afford to fin­ish a project they start­ed last year, or their con­trac­tor is fresh out of a cer­tain mate­r­i­al that’s cru­cial for the job. 

On the oth­er side of the coin, the Home Improve­ment Research Insti­tute was inter­est­ed in the per­spec­tive of con­trac­tors and oth­er pro­fes­sion­als deal­ing with these same price increas­es. How bad is it on their end? How are they deal­ing with the addi­tion­al costs? When do they expect things to go back to normal?

This Feb­ru­ary, HIRI admin­is­tered an online sur­vey to 560 respon­dents across var­i­ous con­struc­tion and remod­el­ing trades to achieve just that. What we learned was not a com­plete shock, but rather a con­fir­ma­tion of the dif­fi­cul­ties many in the home improve­ment indus­try have recent­ly faced. 

Expenses Across the Board

An over­whelm­ing 93% of pro­fes­sion­al con­trac­tors report­ed that their mate­r­i­al costs have increased in the last six months. For those who saw increas­es, the aver­age hike was 19%. Unsur­pris­ing­ly to those in the field, lum­ber and ply­wood have been the most com­mon mate­ri­als to increase in price, but oth­er build­ing mate­ri­als fol­low close­ly behind.

A Shared Burden

HIRI also asked pros how they or their com­pa­nies have han­dled price increas­es. While some pass along this bur­den to their cus­tomers, the major­i­ty are absorb­ing at least some of the costs, cut­ting into prof­it mar­gins. Mean­while, many of those pass­ing the increas­es along to their cus­tomers report­ed a detri­men­tal impact on their busi­ness. More than half (57%) respond­ed that they lost bids due to price increases.

Pros and Price Increases

Taking It Day by Day

On the bright side, with the cur­rent demand for con­trac­tors so high, most pros do not find them­selves in imme­di­ate risk of los­ing jobs due to price increas­es. How­ev­er, when asked about future prices, the major­i­ty of pros answered that they expect prices to be even high­er in six months.

This data was pulled from HIRI’s quar­ter­ly Con­trac­tor Sur­vey, which polls pro­fes­sion­al con­trac­tors on the trend­ing top­ics of the day from effects of COVID to labor short­ages to dig­i­tal busi­ness trends. To read the entire report and for instant access to updates as they are released, join HIRI today.

Stay Informed

If you’re not yet signed up for our newslet­ter, we’d love to get your con­tact infor­ma­tion so you can stay informed about the research we’re doing and infor­ma­tion on our upcom­ing vir­tu­al Home Improve­ment Insights Summit.