The stock market has been volatile. Swings of 1,000 points every few days seem like the new normal. Although all the economic fundamentals appear to be in great shape, volatility surrounds us. The economy grew 4.2 percent in the second quarter of the year, and this quarter, growth slowed to 3.5 percent. The Federal Reserve raised interest rates yet again, and homes sales show signs of slowing.
The volatility is affecting everything, and roofing contractors face clear risks because of it. Many contractors report long backlogs; in some parts of the U.S., contractors report they are even booking work for early 2019. This generally is something NRCA applauds. But even in the current economic environment, it causes pause and a word of caution.
Every level of the supply chain wants assurances. Start with your customers. They want to know the price you quote during the estimate is going to be the actual price when you do the work. You want your roofing distributor to provide materials when you need them at the price you were quoted even though you may not purchase the materials for 90 days or more. A distributor wants the same assurance from roofing manufacturers, and manufacturers want it from the raw material suppliers. So why is it if we all want the same thing, we can't have it? Now, there is some irony for you.
Compound all this by the fact roofing products need to be moved throughout the U.S. Most travel by truck. And trucking companies have their own volatility. The trucking industry, like the roofing industry, cannot find enough workers. They, like us, are paying more for fuel. They, like us, try to pass these increases along. And the shipping costs reflect this. What can you do to protect yourself?
For good or bad, this is not the first time the roofing industry has faced this problem. For years, the National Roofing Legal Resource Center has provided NRCA members contract language they can use to help protect them from price volatility. NRCA members have access to contract language free of charge, and I strongly recommend you add it to your contracts now.
Although it is easy to complain about price volatility, I recommend we also say a word of thanks for it. A growing economy that is providing work and stability for our families is good for us all. The roofing industry is having nearly unprecedented success. As this holiday season is upon us, there is much to be thankful for.
Richelle E. Goodrich said one of my favorite quotes: "Gratitude doesn't change the scenery. It merely washes clean the glass you look through so you can clearly see the colors."
As NRCA's CEO, let me express my appreciation for you. During the past two years, you have allowed me to see and interact with the roofing industry in all its colors and hues. I am grateful for your membership and the work NRCA's leadership does each day in communities and task forces. I am thankful for your generosity. And I am thankful for the skills of an industry that is protecting this country's most valuable possessions.
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