Newspaper article THE JOURNAL RECORD

Postponing Sticker Shock: Oklahoma Builders, Supply Firms React to Drywall Price Hike

Newspaper article THE JOURNAL RECORD

Postponing Sticker Shock: Oklahoma Builders, Supply Firms React to Drywall Price Hike

Article excerpt

Local builders and supply companies are bracing themselves for an unprecedented 35-percent price increase that drywall manufacturers say they will implement on Jan. 1, but it remains to be seen if the hikes will stick.

"We're in wait-and-see mode right now," said Russ Gammill, vice president of purchasing for Norman-based homebuilder Ideal Homes. "Eventually, these costs get passed onto the consumer in some way, but if it's just a blip in pricing, then it might not affect things."

Forced to sell materials at below cost because of a sluggish construction industry nationwide, drywall manufacturers have tried in the past to institute price increases, Gammill said. They eventually gave in to pressure to reduce prices again when it became apparent that there just wasn't enough demand to support more expensive materials, he added.

If the higher drywall prices do manage to hold, it could affect the cost of commercial construction projects, as well as how much homebuyers will pay for a new house, he said.

"Everyone is going to have to make an adjustment to their business plans to accommodate the higher prices, otherwise it's going to come directly out of their profits," Gammill said.

Gayle Smith, manager for Magnum Materials in Oklahoma City, said the company has never had to deal with a 35-percent price increase before, but will simply have to pass the cost onto its customers.

"The drywall manufacturers for years have put out increases that were fairly small, but they never seem to keep the increase," Smith said. "It's been a cycle literally for years where they work themselves back to where they were and they're not making any money."

Like homebuilders, supply companies don't really have any choice but to pass the higher costs onto their customers, said George Hughes, general manager of A&D Supply Co. in Oklahoma City.

"It's just going to cause inflation and the cost of houses to go up," he said.

Following the old business mantra "buy low and sell cheap," Hughes said he wishes A&D could stockpile drywall before the price goes up, but can't because suppliers have moved to controlled distribution in the past few months, ahead of the Jan. …

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