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ZEN Industries eNewsletter:
January 2022

Inflation Strikes Back

Trucking, Material, and Labor Prices Surge

Trucking

Trucking PricesIn the fall of 2021, hot rolled steel prices appeared to be moderating. While this looked like a good sign, fast-forward a few months and inflation strikes back. Today, the HVAC industry is dealing with cost rises in almost every area, including material prices, labor, trucking, refrigerant, and more.

The reasons are both industry specific and general inflationary forces in the economy. To start, there’s no need to look further than transportation costs.

According to Freightwaves.com, “Since Nov. 1, the average retail price of diesel fuel as reported by the DOE has risen nearly 40%.” and “Truckload spot rates continue to trend higher in 2021, averaging $3.18/mile over the past two months compared to $2.96/mile (7.4%) from November to December of last year.”

When fuel costs go up, it affects delivery of equipment, duct, and even the jobs that contractors will bid on.  

Material Prices

Material PricingAt ZEN Industries, we conducted our own internal price study on 26 gauge, 60” wide coil pricing from 2006 – 2021. Our evaluation shows that coming into 2021, the price steadily increased from $0.7575/lb. up to $1.3365/lb. Pricing in the last 4-months has ranged between $1.45 - $1.50/lb.

While the recent price spike is alarming, in checking with ZEN Industries’ vendors, they forecast prices to moderate through the first quarter of 2022, dropping back into the $1.30 range.

More coil imports will be arriving throughout the year hopefully bringing down the domestic coil pricing with it as well. Some vendors think we may see $1.00/lb. pricing by the end of 2022, but prices below $1.00/lb. may be gone forever at this point.

Labor

HVAC Labor FabricationWhile demand for HVAC work continues to increase, the long-standing labor shortage in construction adds its own inflationary pressure to many projects.

With an aging workforce, qualified HVAC labor is hard to find. The shortage of skilled workers is forcing many employers to boost salaries as a means of staying relevant in the marketplace, placing labor in the driver’s seat.

According to the U.S. Bureau of Labor Statistics, mechanic and installer jobs are expected to grow 15-percent nationwide by 2026. That means that regardless of mentorship programs and trade school promotions of the trades, labor will continue to be a core cost factor in completing new projects.

That said, the one development which may counter rising labor costs is technology and the developing world of smart systems, jobsite robots, and building information modeling. According to an article in SNIPS “The short answer of where robotics fit in is just about every aspect of jobs that are labor intensive.”

These innovations reduce the need for onsite labor and make the most of the skilled individuals who remain, enabling them to handle higher level tasks, complete jobs more quickly, and manage multiple jobs simultaneously.

HVAC Costs Continue to Rise

Factors ranging from material costs and transportation to shipping bottlenecks and labor shortages have conspired to create a situation where players in the construction industry, including HVAC fabrication and installation, must bump pricing several times a year, if not quarterly.

Falling prices in any one area will only modestly affect the inflationary pressures driving HVAC cost decisions.

While the current environment certainly presents challenges, the U.S, HVAC systems market is still projected to grow at a compound annual growth rate of 5.9% over the next seven years, reaching 197.5 billion dollars in value by 2028.

Interested in learning more about ZEN Industries and our capabilities in HVAC duct fabrication.  Give us a call 877-600-0274, or visit our Contact Us page today!

Partner with ZEN to Do More and Earn More

Let ZEN Industries be your partner in the HVAC Industry as an experienced, high-quality manufacturer of HVAC duct of all types. Our goal is to partner with our customers in ways that make the entire workflow from order to installation a seamless exercise in time and cost savings.

We also have the capabilities of producing spiral ductwork in a variety of materials and coatings, including:

  • Galvanized G-90
  • Stainless Steel
  • Aluminum
  • PCD Polyvinyl Coated
  • Galvanneal

As an experienced fabricator of HVAC duct for over 22 years, ZEN Industries supplies traditional Rectangular Ductwork as well as Spiral Ductwork, Double Wall Spiral, , PCD Ductwork, and Specialty Ductwork.


Success is All About Great Service

Founded in 1999 on a set of unbreakable core principles, ZEN strives to provide top-quality fabrication, advice, and planning for our customers.

The quality of our HVAC duct work is of the highest caliber and our price is competitive with the best in the industry. Of course, ZEN Industries Inc. gains its edge with unbeatable service, and service means people - it's about our experienced personnel and the relationships we build with each and every customer.

At ZEN Industries, we believe success is all about great service. Our affordable HVAC shop drawings, estimating services, and duct fabrication can be reached at 877-600-0274, or visit our Contact Us page today!

Learn more at www.ZENindustries.com

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