Back in the 1970’s, when interest rates were 20% and prices rose daily across the essentials – food, gas, clothing – inflation was far and away the number one issue on the minds of Americans. While we’re not seeing this type of across-the-board inflation in 2021, there are areas of the economy where prices are dramatically increasing and that includes both construction and hardwood lumber prices.
As reported on Harrisburg’s Fox43 just a week ago, construction lumber, the soft pine normally used in residential construction, has increased 278% in the past year. That’s an eye-popping number that has implications not only for new home construction, but also for those who want to remodel a kitchen, bath or office.
Needless to say, as a kitchen design and remodeling firm we’re acutely sensitive to the increased cost of wood and how it affects both the price and timing of our client projects. For example, if you were to have quoted a project with us a year or two ago, and put the project on hold until 2021, you’d not only see an increase in the cost of the project by ten to twenty percent, you would also see a longer lead and delivery time for the cabinetry and project completion.
Why The Cost of Cabinetry is Higher in 2021
Two things are driving higher cabinetry prices and longer cabinetry production lead times. First, while not rising at the rate of construction lumber, the hardwood and plywood used in fine custom cabinetry has increased anywhere from 10% to 35% since the beginning of the year, depending on the species. While the cost of the wood is only one component of the overall cost of cabinetry, it’s a key input that impacts pricing.
Second, cabinetry manufacturers are having a hard time finding enough skilled workers to keep production running at capacity. Increased consumer demand for cabinetry is in direct conflict with a labor market where the current Federal and state unemployment payments make it attractive for some to stay out of the labor force. For example, according to Zip Recruiter,
The maximum unemployment benefit available to individuals in Pennsylvania is $872 a week, or about $22 per hour, through September 6, 2021. After that, the maximum weekly benefit for individuals is $572 a week, or about $14 per hour.
In this unusual COVID-19 employment environment, cabinetry manufacturers have to increase wages to compete against unemployment benefits and those wage increases are passed on to the consumer in the form of higher prices for cabinets.
How A Tight Labor Markets Impacts Your Kitchen Renovation
Cabinetry makers are not the only ones impacted by the tight labor market for skilled workers and rising lumber prices. As you can imagine, our trusted contractors, who we’ve worked with for years, are having difficulty finding skilled craftsmen to fill their crews. When you’re competing with Pennsylvania unemployment benefits that can be as high as $22 an hour, you’re going to have a problem. As a result, projects that might have taken three weeks when you’ve got a full crew on the job are now taking four weeks with smaller teams. Moreover, we’re having to push the start date for many projects out an extra month or so to account for the extra time required due to longer lead times for cabinetry and smaller construction crews.
And needless to say, most kitchen and bath remodeling jobs use lumber to frame out new walls or to modify existing structures. The price we pay for typical 2×4’s has increased 150% since the beginning of the year, a number that seemed unimaginable less than a year ago.
Transparency is the Key to Satisfied Clients in This Environment
In an environment of rising prices, longer lead times, and extended project durations, the keys to maintaining the highest levels of quality and customer satisfaction are honesty, transparency and frequent communication. Whenever we meet with a prospect for the first time, we describe the current pricing pressure on cabinetry and construction, what the implications are for possible future price increases, and how the labor shortage could impact project timelines. We find that an honest discussion in the earliest stages of our discussions helps to set a foundation of trust that’s needed for a good working relationship.
If you were to walk into our showroom tomorrow, June 1, with a deposit in hand, knowing exactly what you wanted in your new kitchen, stipulating only that the project be completed by the end of the year, we would have to politely, but firmly decline the offer. In June of 2021, for all the reasons we just discussed, it would be all but impossible to deliver a spectacular, Mother Hubbard’s kitchen in the next six months. While it might be tempting for others to make such a promise, we know from nearly four decades of experience that fulfilling the promises you make, including project timelines and delivery, are critical to a customer’s satisfaction.
This is not to say we’re not actively seeking new clients, or that we won’t do everything we can to expedite the design and construction of your dream kitchen, but rather that the trust you place with us is honored by straight talk, deadlines met and promises fulfilled.
Do come and visit with us if for no other reason than to get an honest appraisal of how a very wild post-COVID environment will potentially impact your project.