California wildfires impact construction material pricing across the nation

California wildfires have significant implications for construction costs and supply chains across the U.S., with 60% of the state's forests in high-risk wildfire areas and California supplying 10% of the nation's lumber. These fires drive up the cost of materials, especially lumber, with prices fluctuating between $475 and $625 per thousand board feet. Experts predict further increases of 25% to 40%, even before considering tariffs. The impact extends to other building materials, including insulation, drywall, steel, and concrete, due to increased demand and supply chain issues.

We anticipate that lumber costs in California will rise by 6% in the first six months following recent wildfires, while national prices are expected to increase by 3.5% in the first 3-6 months and by 15% over the next 15 months. Clients, contractors, and developers should secure materials early, negotiate fixed pricing, and include price adjustment clauses in contracts to manage cost fluctuations. Recommendations include diversifying material sources and maintaining flexibility with material choices.

For further details, the full analysis can be found here.