In the past month, two major hurricanes blew across the southern U.S. These storms brought damaging floods and wind. As a result, many homes and businesses were destroyed, and the final cost of Hurricanes Harvey and Irma won’t be known for months. The costs will total many billions of dollars in Texas and Florida alone. The entire country will feel the impact of these storms. We’ll certainly feel the impact here in Wisconsin, including in our construction industry.
In the short term, Wisconsin could see increases in the price of construction materials. NewsOK reports that wholesale lumber prices are already up 23% since the Spring because of a U.S.-Canada trade dispute. An increase in demand as rebuilding efforts begin will put further pressure on prices. Additionally, delays at ports affected by the hurricanes will cause prices of flooring, drywall and other materials to go up as construction companies work through the supplies they have on hand. However, the good news is that prices should stabilize once materials manufacturers catch up to demand.
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Construction Labor Force
Meanwhile, the construction market in the Badger State is strong. This makes it difficult for contractors to find enough workers and tradespeople. The expectation might be that this would put pressure on local labor markets as workers might head South for higher wages. While construction jobs do increase after weather-related disasters — as discussed in this article at Quartz — most of the new jobs are filled with workers who are local to the storm areas.
Ken Simonson, chief economist for the Associated General Contractors of America, concurred with this in a recent Waco (Texas) Tribune article. “After Hurricane Katrina, ‘there were predictions of a giant sucking sound of workers heading to the Gulf Coast,’ Simonson said. ‘But people now are busy in most parts of the country and don’t need to relocate there.’”