Eikenhout : Roofing, Siding and Windows

President’s update

On March 31st I wrote a price increase letter to our customer base while expressing hope that I wouldn’t have to write another one anytime soon.  The 2011 season is shaping up to be very much like the volatility of 2008 as we are continuing to receive price increase announcements from all of our manufacturers.  Like 2008 there has been a steep climb in oil and gas prices and extreme storm activity across the country.

While barrel prices for oil have dropped a bit in the past week or 10 days, and U.S. demand for gasoline has decreased for seven straight weeks, gas prices just don’t seem to decline as quickly as they rise.  The additional fuel surcharges on a truckload of shingles from our manufacturers amounts to about $1.25 per square.

Spring storms have caused severe property damage across the country.  One only has to turn on the nightly news to witness the devastation in the Midwest and Southeast sections of the country.  Significant damage has has occurred in several large metropolitan areas including St. Louis, Kansas City, Charlotte, Charleston, Minneapolis, Pittsburgh and Ft. Worth.  The tornados that ravaged Alabama caused significant damage to Tamko’s roofing plant in Tuscaloosa, thankfully without any injuries to their employees.  Tamko hopes to have that plant up and running in mid to late June.  In the meantime they are absorbing the roofing demands from that area into their other plants.  As widespread as the storm damage has been, there probably isn’t a roofing plant east of the Mississippi that hasn’t been affected.

The next wave of price increases will affect us on materials we receive after June 13.  On average this June increase will be in the neighborhood of 10%.  This is the third increase for this year.  Pricing by July will probably be as much as 25 – 30% higher than it was at the beginning of the year.  Please take this information into consideration as you bid and contract work for the summer months.  The worst case scenario would be to secure work at today’s prices for jobs that you aren’t going to schedule until July and August.  Realistically, pricing on standard laminates will be at least $15 per square higher in July than it was in March, and if demand continues to increase nationally it could be more than that.  Please refer to the increase letters we’ve posted under Pricing News where you can read the actual manufacturer’s letters.

At Eikenhout we believe that it is our responsibility to keep you informed of what is happening in our industry.  While it may not be what we want to hear, or what you want to hear, ignoring it will not make it go away.  We want you to be fully armed with current and timely information which will allow you to adjust your business practices to make sure that you stay viable and profitable.  Please feel free to contact your branch manager, inside or outside sales person or any of our management team with any questions about any of this information.

Thank You,