Focus

The volatile price of a barrel of oil will continue to affect how much you pay for materials and, consequently, how much your customers pay for roofing work.

In fact, according to a recent online survey conducted by NRCA and SmartBrief Inc., Washington, D.C., 88 percent of survey respondents say rising material costs have significantly affected their companies.

If you are an NRCA member, you already received a Special Report in July explaining there are a few primary drivers of current rising material costs: the price of crude oil, increasing demand for steel and a lack of reliable transportation.

Crude oil is used to produce roofing materials, such as asphalt, asphalt shingles, built-up membranes, polymer-modified bitumen membranes, coatings, etc.

Steel price increases are directly related to the significant demand for steel by China and India. Consequently, the prices for metal panel roofs, metal shingles and several accessories for more traditional roof systems are increasing.

Transportation—whether by air, rail or road—depends on oil, of course, and the transportation industry as a whole is passing on its cost increases to its customers.

But pricing isn't the only challenge facing the roofing industry. Suppliers are reporting material shortages, and as demand increases for a shrinking supply of materials, simple economics may come into play and push prices even higher.

What this means is you need to be prepared not only to re-evaluate pricing of your services but also to include language in your contracts that protects you from any sudden swings in material costs or problems with material availability.

NRCA's Special Report contains sample contract language you can use. NRCA members can access the report at www.nrca.net/member/specrpt/0708_raw_materials.aspx. If you are an NRCA member who has not registered on the Web site, it is easy to do so: Simply go to www.nrca.net.

Ambika Puniani Bailey is editor of Professional Roofing and NRCA's senior director of communications.