The devastating effects of Hurricane Helene are likely to ripple throughout the construction industry—even in regions as far away as Northwest Arkansas. Here are some things to keep in mind about how this storm could temporarily influence building costs in our area.
1. Material Shortages
Natural disasters with the widespread impact of Hurricane Helene can cause significant disruptions in supply chains. With thousands of homes and buildings destroyed across Florida, Georgia, South Carolina, North Carolina, Tennessee, and Alabama, materials like lumber, drywall, and fiberboard will be in high demand as these communities rebuild.
With a significantly increased demand for building materials in coming weeks and months, developers in Northwest Arkansas should expect a potential temporary shortage of some materials and equipment.
2. Increased Supply Costs
As demand increases for these building materials and equipment, with only a limited supply available, costs for these materials can be expected to rise accordingly, impacting building budgets. While price-gouging is illegal in most states, simple supply and demand issues will likely impact the cost of lumber, steel, etc. in coming weeks.
Additionally, with the destruction and blockage of some major roadways across the Southeast, transportation complications of these supplies and materials could contribute to increased building costs.
Following Hurricane Harvey and Hurricane Irma in 2017, lumber was the only material that showed a significant and sustained increase in cost post-hurricane.
3. Labor Market Challenges
This has the potential to divert a portion of these individuals to projects in affected areas across the Southeastern U.S., which could lead to a shortage of labor in other regions, including Northwest Arkansas. Labor shortages can lead to an increase in wages as contractors compete for available workers, further driving up overall building costs.
Conclusion
While Hurricane Helene did not make landfall in Northwest Arkansas, its impact will likely be felt through increased construction costs across the country, as the cost of damages from this deadly storm are expected to hit $35 billion. Builders and consumers in NWA should prepare for a potentially more expensive construction landscape in the coming months.
Business Summit
Collier & Associates is excited to announce our first-ever C&A Business Summit, taking place on October 17th.
This summit will gather change-makers across Northwest Arkansas, including business leaders, economists, marketing and branding professionals, real estate experts, and more, all united in our mission to shape a better future for NWA.
Our distinguished lineup of guest speakers features Mervin Jebaraj, Director of Economic Research at the University of Arkansas, Jordan Wright, Founder and Owner of Wright’s BBQ, Graham Cobb, the visionary behind the “Because Bentonville” economic development project, Ashley Knight, Chief Operating Officer at Harvest Group, and Nelson Peacock, CEO of the NWA Council.
Registration opens on September 1st—mark your calendars and join us for this impactful event.
NWA Real Estate Market Update
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Bethel Brew Coffeehouse has officially opened its doors in Rogers, Arkansas, serving specialty coffee with a purpose. Every guest is welcomed with warmth and love as the coffeehouse strives to build a community where everyone feels at home. They proudly serve private-label organic beans, which are roasted locally in Northwest Arkansas, ensuring a fresh and delightful experience with every cup. Come enjoy a cozy atmosphere and support a business dedicated to fostering connection and community!
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