The roofing industry in Toronto is one of many construction services that has experienced increased costs necessary for the delivery of services.
The end result is that consumers ultimately end up bearing the costs of such industry changes. Factually there are a number of factors which have contributed to the current market roofing prices in Toronto.
The first of which is supply and demand. A robust real estate market, combined with many people working at home has created high demand for construction services as people choose to invest in the improvement of their homes and living environments.
Another factor involves supply chain issues resulting from the pandemic, where many manufacturing facilities and raw material suppliers have reduced work forces that were staying at home to curb Covid spread. This resulted in a backlog of orders.
Also related, is that efforts to catch up on manufacturing have created increased demand on the transportation sector to move such goods all over North America. As a result the industry has unprecedented demand for transport drivers, trailers and trucks.
Many goods related to the roofing industry in Canada come from U.S. and foreign markets. Shingles as an example; where American brands that enjoy a high reputation for product quality, are being distributed in the United States due to their huge market demand, and reduced distribution costs domestically. As there are border challenges, and delays to enter Canada, it can be easier for such manufacturers to distribute to neighbouring states where they can receive demand premiums paid in U.S. dollars.
The exchange on currency means that Canadian contractors pay more than their US counterparts, and prices have naturally increased as a result of U.S. demand for such goods. It is important to note that some shingle brands which were considered to be Canadian origin once upon a time, are actually subsidiaries of U.S. owned construction material suppliers.
Due to increased U.S. demand, and much of it resulting from hurricane/storm damage in the Southern U.S.; some Canadian shingle suppliers are also required to feed the market to the south.
Fuel prices have increased by forty percent as of this writing, when compared to January of this year.
The increased costs not only affect transportation pricing, but petroleum based roofing products such as bitumen, and asphalt used In the manufacturing process. Gasoline has become more valuable than petroleum by-products such as bitumen. There is more refining of crude oil for fuel as a result.
Roofing materials have increased twice this year over normal annual price increases which usually come in April and September. Such historical increases are usually five to ten percent annually. With current increases and warning of further increases before year end; roofing materials have currently increased by over thirty percent ,and only half way through the year.
This has forced many contractor to put time limitations on their estimates because the market is so volatile.
Some consumers believe that if they wait to complete their construction agendas, prices will come down.
There is no evidence to currently suggest that this will actually occur. While we have seen spikes in the lumber market prices as an example; and some downward corrections on pricing, lumber retailers have to sell stock for which they have paid a premium , and it is reported that in spite of higher prices, building demand continues to put pressure on the supply chain. While prices for lumber may adjust somewhat, insiders report that it is highly unlikely that lumber will ever settle back to pre-pandemic prices.
To add to the demand issue, is that contractors and tract builders that have the means, have ordered or taken over large inventory for fear of increasing prices moving forward.
Metal products such as sheet steel, copper, and aluminum coil have been delayed in ports on the west coast, as China is the dominant supplier of such goods. The roofing and siding industry has experienced six month delays on product delivery of such goods. Kaycan™ ,a major Canadian manufacturer of siding, gutters ,and soffit materials including aluminum trim coils, not only had to cope with waiting for raw materials, but also had to temporarily close their Montreal manufacturing facility due to the Quebec government mandated lock downs. This is one example of many construction suppliers facing such challenges.
In relationship to manufacturing plants, requiring Covid-related retrofits and increased cleaning protocols which were also necessary to be implemented and as a result, created another cost of doing business.
There is yet more to the story. Labour costs have also risen considerably due to supply and demand.
It has been a known fact for some time that the construction sector suffers from an ever shrinking pool of qualified labour.
Professional tradespersons continue to inch toward retirement age generally. Specifically, trades people who are highly skilled in specialty areas like roofing and sheet metal, are like gold. Contractors that have the work, compete to keep such workers ; as others will snap up the capable in a heart- beat, luring them with increased pay scales, bonuses, and benefits.
As roofing involves heavy physical labour in particular, and working at heights, with a high element of danger in many cases; even attracting labourers and apprentices to the trade has become challenging.
As other sectors like transportation and manufacturing are raising the wage bar even higher to meet their demands; outdoor physical work becomes less appealing to young people entering the work force.
Mom and Dad, you are simply not encouraging your kids to be roofers I’m afraid.
To help combat the problem; foreign workers are being sought to fill these roles in the trades, and also represent increased costs beyond decent wages, such as sponsorship, helping with accommodations in an expensive rental market, and transportation allowances.
Summing it all up, these issues not only impact the roofing industry nationwide, but the entirety of the construction industry. The Conservative government under the leadership of Premier Doug Ford has done much in the Province of Ontario to help address such issues of skilled worker shortage by cutting red tape necessary to on-board workers, and by bolstering apprenticeship funding and facilities . The efforts however, along with employer initiatives , are not going to be a quick fix anytime soon. They are positive steps in the right direction though .
As a result; average direct project costs have risen by over fifty percent in the past twelve months. This does not factor indirect costs like fuel and insurance.
It is important to consider the subject of insurance when thinking about increased costs to the roofing industry. Costs have increased so much in the past few years, that many roofing contractors simply can’t afford to carry the comprehensive coverage necessary to do flat roofing work for instance.
Our company pays in the six digits for liability insurance annually as an example; to have sufficient protection for our clients. Add to that vehicle premiums, other insurance types necessary to operate the business and protect workers,and one can imagine all the other costs of operation. Annually none of these decrease, they always rise certainly no less than the cost of inflation. While insurance companies and banking institutions report record profits year over year; the same cannot be said of the roofing industry.
Factually the roofing industry is a high risk business proposition, where many business owners work to keep margins lower to retain business. Consumers should know that in spite of increased material, labour, and operating costs, margins have not kept pace in the roofing industry in Canada.
As a result the roofing community in Toronto and indeed across the country, will have no choice but to raise prices to keep up with cost increases and to remain viable.
I can remember a new truck costing $3,700 in 1977. Fast forward to 2021; a similarly equipped truck now costs $70,000.
On a similar parallel; a decent home in 1977 cost around $125,000 and now the same house is worth $2,000,000 in Toronto.
On balance, consumers investing in home renovations and repairs, including roof replacement, and even in light of increasing costs for such work, still achieve a great return for the investment in improvements that they make.
To learn more about roofing, gutters, and related services, contact AVENUE ROAD ROOFING® or visit www.avenueroadroofing.com.