Investing in Commercial Real Estate

How will Hurricanes Harvey and Irma affect local construction industry?

By  David Haug


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.

Construction Prices

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.

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.’”

More reading

For more about other ways this hurricane season will affect our wallets, check out articles from MSN, the New York Times and Business Insider.

David Haug

Follow me here

About the Author

David N. Haug is the Managing Broker of Lighthouse Commercial Real Estate in Madison, WI. He is passionate about helping clients, customers, and friends succeed in finding property, selling and leasing property, and investing in commercial real estate. With over 17 years of CRE experience David has analyzed, reviewed and transacted hundreds of deals worth untold millions of dollars. Reach out today and ask David to guide you on your commercial real estate voyage!
Connect with David on LinkedIn:

Schedule a FREE Consultation Today!

Let's Start a Conversation!

The first thing I want to do is Understand Your Current Needs and Goals.

Leverage my nearly 15 years of Commercial Real Estate Experience for Your Direct Benefit.

Guidance begins by first Asking for Help.

You have nothing to lose and So Much to Gain, so Let's Get Started!

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}