Drywall is a major component in demolition asset recovery. Demolition outfits recover drywall for its key component, gypsum, a mineral that is also used in cement, fertilizer, and compost, among other applications. Since gypsum typically makes up to 90% of the weight of drywall, it can be recovered fairly easily and is currently being recycled in several locations across North America.
This blog is geared toward demolition and salvage companies who recover and recycle drywall (or who sell it to a third party for recycling). We discuss how drywall materials and services are predicted to rise in price over the next couple of years. We also look at what this could mean for the demolition and salvage industry in general.
Upcoming Price Increases For Construction Materials, Services
According to a procurement report produced by IBISWorld, leading up to 2016, we will likely see rising prices for certain construction materials and services, including drywall and plastering services, as well as materials such as plywood, particleboard, and medium density fiberboard. Because of a worldwide increase in demand for copper, the price for electrical wire and cable is also likely to increase up to 4% by 2017.
Dramatic Price Increase for Drywall and Plaster
Pricing for drywall and plastering services is expected to rise at a high rate—an increase of up to 7.5% per year is predicted, largely because of rising gypsum prices. It is hard to find a good substitute for drywall and plaster material, driving demand higher just as construction and remodeling increases. These same market forces are also expected to raise the cost for installation services.
Now that we know that gypsum will be a hot commodity in the future, what should demolition firms do? As buyers look to mitigate costs, they will be looking for competitive contracts for drywall materials. A consistent drywall producer, such as those that recover and reuse demolition drywall, can see big growth in the next few years, if they are well positioned to take advantage of the rising prices. Consistent inventory, smooth operations, and competitive, stable pricing will attract buyers. Demolition firms may also be able to renegotiate the drywall prices they get from drywall recyclers; as the market prices rise, salvage operations can negotiate that their slice of the pie grow apace.
Don’t be left behind when it comes to rising costs of drywall and plastering services in upcoming years. Be proactive and take measures to mitigate the potential negative effect of these changes and use them to your advantage by thinking about how your demolition and salvage company can profit from these changes.