If the U.S.-China tariff war lasts, builders and contractors state that new tariffs on Chinese goods create $2.5 billion in added costs to the home remodeling industry – and those extra costs are going to be passed on to customers.
Countertops, flooring & lighting costs rising
Tariff costs on Chinese imports jumped from 10% to 25% on May 10, which builders say will raise the cost of about 450 goods utilized by the home building industry, including countertops – like granite, marble and quartz – tile for bathrooms and backsplashes, light fixtures, cabinets, heating and cooling equipment, and flooring.
“I wish we would not just have to pass it along to customers, but at this point I don’t know how to engineer around that,” Bruce Case, CEO of Case Remodeling, told CNBC. “We can’t use different products that aren’t as effective.”
The White House has expanded tariffs on $200 billion worth of Chinese imports, including $10 billion of goods utilized by the home building industry. U.S. and Chinese officials ended two days of trade talks without a deal on Friday. China was the United States’ biggest trading partner in 2018.
Last week, a survey from the National Association of Home Builders also revealed that a labor shortage continues to impact housing projects by increasing costs and delaying timetables. Remodeling jobs that involve carpenters, framing crews, bricklayers and electricians are seeing some of the largest shortages.
“The labor shortage continues to be one of the top concerns for remodelers across the country,” says Tim Ellis, the NAHB’s Re-modelers chair. “An ongoing challenge for remodeling is keeping their prices competitive while dealing with the increasing costs of labor.”
From half to 70% of the remodelers surveyed by NAHB reported that the top effects of the labor shortage have been higher wages and subcontractor bids, higher prices for customers, and difficulty completing projects on time. Some even say they rejected projects as a result of the increased costs.
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