In speaking with Chippewa Valley contractors one topic continues to rise to the top…..rising costs of lumber and steel! In recent weeks steel price increases have caused many contractors to rework the material costs on their jobs. Lumber prices, which skyrocketed upward at the beginning of the pandemic in 2020 began to come back down around the end of the summer of 2020. Currently both the lumber and steel prices have taken off again surging 20% to 25%. Experts predict that lumber and steel prices will remain elevated into 2022, but lower than the current extreme rates.
According to the Producer Price Index, softwood lumber prices increased 73% while Iron and steel scrap jumped 50% over the past year. Many potential homeowners are rapidly being forced out of the market due to these rising costs. According to the National Homebuilders Association the average price of a single-family home has risen more than $24,000- prohibiting Chippewa Valley Contractors from providing much needed housing for our workforce. At a same period when one has housing prices grow faster than wage growth it creates a more serious housing inventory shortage. This in turn negatively impacts our local manufacturing companies because they will have more difficulty in attracting and retaining a skilled workforce.
Chippewa Valley YouthBuild- an award-winning workforce development program- is also being impacted by these high lumber prices. CCEDC is a strong supporter of Youth Build because it is one of the biggest tools in dealing with housing affordability because it helps address the labor shortage and skills gap that also plagues contactors. As this industry struggles to fill a gap in labor supply, the cost of lumber is limiting training projects that students need to become successful. Chippewa Valley YouthBuild also provides education, employment skills and career direction for at-risk young adults by involving them in the construction of a new house. When completed, the house is sold to an income-eligible family in the community. Charlie Walker, President/CEO of CCEDC believes that the YouthBuild program is a huge asset in the Chippewa Valley because it addresses labor shortages and skills gaps within the community.