Drywall shortage raises prices

This article submitted by Michael Jacobson on 3/31/99.

A crucial building product is expected to be in short supply and high demand this year.

With more new homes being built and more old ones being remodeled throughout the nation, the supply of drywall has not kept up and is becoming increasingly valuable.

Commonly known by the brand name Sheetrock, drywall is paper-covered plasterboard. "It's a major wall covering in homes," explained Dick Michaelis of M & M Lumber in Paynesville. "In a new house, all the walls are usually Sheetrock."

"In all the years...you'd think they'd invent something lighter and easier to handle, but they haven't, so there's really no substitute," added Michaelis.

The national shortage has caused drywall prices to increase by 25 percent over the past 15 months. For new home buyers, that is an increase of $300 to $500 or more, depending on the size of your house.

Another price increase has been announced for April. "Once we get in the full swing of construction, we could easily see another increase," Jim Meyer of Lifestyle Lumber in St. Martin told the St. Cloud Times.

According to the Wall Street Journal, there hasn't been a new drywall plant opened in the United States in the past 10 years. Meanwhile, new home construction has increased, average home size has increased, home renovation has grown, and commercial building has made some demands. "By 1996," the Journal reported, "nearly all U.S. plants were running flat out, and drywall was being imported from Canada to meet demand."

The largest drywall manufacturer, USG Corporation, has raised prices six times in the past 15 months, according to the Journal. Profits for USG more than doubled last year. Profits in 1997 were $148 million, and profits in 1998 were $332 million, according to the Journal.

"Our biggest concern is the availability," said Vicky Frank of Bork Lumber and Supply, "so that we have it for the customer."

"Yeah, I've just been scrounging for Sheetrock," said Don Frank.

The Franks have been warned by their drywall supplier to expect more price increases and to condition their bids to include the actual cost of the drywall. A shipment of drywall they received last week cost them more than their previous selling price.

The shortage is most acute in the southern states and around Houston. In those areas, according to the Journal, lack of drywall is causing considerable delays.

"We haven't experienced a whole lot (of shortages) yet. We've kept ahead of it," said Craig Theisen of Theisen Building Supplies, from their home office in Pearl Lake. "It's going to get tough this summer."

With demand for drywall increasing, walk-in customers wanting to buy a few pieces for a small remodeling project might be out of luck. Several lumberyards stressed they will need to honor their presold jobs first, and that might not leave any extra on the shelves. "Before this happened, anyone could walk in off the street and get 50 sheets," said Theisen. Now, Theisen said, they need to guarantee that the projects they have already sold will get the necessary materials.

"Some of the consumers might be out in the cold if it gets tight," added Michaelis.

Advice to customers boils down to planning and patience. Plan far enough ahead and ask your contractor about getting the necessary drywall. "If you do a project involving Sheetrock, I'd get it early," said Michaelis.

"As soon as we know we have a house sold, we're calling in immediately to see if we can get the Sheetrock," said Vicky Frank.

Expect increased costs for the drywall and possible delays.

The Journal said USG has a new factory opening in Alabama this fall and an expansion of their Chicago plant will also open in the fall. Production and distribution will need to be up and running awhile before the shortage is drastically affected. "You aren't going to see (new plant openings) make a difference until the following spring," said Theisen.

The building industry also faces other shortages. Insulation was short last year, and continues to be in high demand. To order insulation now requires several months notice instead of a mere week.

Shingles are also in short supply.

The drywall shortage could be the most severe. "Everybody's nervous about it," said Meyer. "We aren't really sure how serious it's going to be."

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