This is how inflation and the cost of materials will affect the reconstruction of Florida after the passage of Hurricane Ian

By Rob

If there is any consolation for survivors of Hurricane Ian, it is that the rise in the cost of building materials has begun to slow down, and in some cases even reverse.

Thanks to a slowing global economy, what seemed like a relentless rise in material prices over the past two years had begun to fade when Ian hit Southwest Florida as a Category 4 storm on Wednesday.

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The price of lumber, which soared during the COVID-19 pandemic and peaked in January, has returned to pre-pandemic levels, according to data from CME Group, a global markets firm.

This is due, in part, to a sharp slowdown in construction, as higher mortgage rates and house prices have taken hold.

Meanwhile, global shipping bottlenecks have eased, making more containers available and lowering freight costs.

Data from the Drewry Index, a global shipping tracking company, shows that costs have fallen for 31 consecutive weeks and have fallen 61% in the last 12 months.

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“You're not going to have to spend as much on flooring or kitchen supplies.

Right now [prices] are going down as we speak,” said Michelangelo Cocchiola, co-owner of Imeca Lumber & Hardware in Florida.

"If the hurricane had come two or three months earlier, it would have been much worse than now," he said.

Demand for homes across the country has stalled, according to Brendan Lowney, director of Forest Economic Advisors, a company that studies construction costs.

Higher prices have also caused producers of key raw materials, such as wood, to expand their production capacity, which has helped to cool down those price increases.

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In addition to wood, the prices of other key raw materials for home construction, such as PVC (polyvinyl chloride) and copper, are also falling, according to market data.

The cost of materials "has dropped substantially."

But they are still high.

The Bureau of Labor Statistics reported this month that prices for building materials had risen 4.9% so far this year, and 14.3% in the past year.

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The magnitude of the reconstruction that needs to be done could also cause demand and prices to increase from now on.

According to real estate information group CoreLogic, early estimates suggest Hurricane Ian will be

, with a record number of homes and property lost.

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"Hurricane Ian will forever change the real estate industry and the infrastructure of cities," said Tom Larsen, associate vice president at CoreLogic who oversees hazard and risk management.

“Insurers will go bankrupt, homeowners will be forced into default, and insurance will be less affordable in regions like Florida,” he added.

Victims of Hurricane Ian and those responding to the disaster are likely to find themselves with other rising costs amid an annual headline inflation rate that remains hovering around 8%.

Food price growth continues to hit multi-decade highs.

Stephanie Ink-Edwards, CEO of the Community Cooperative, an organization fighting hunger and homelessness in Lee County, said that among the losses Ian's victims are experiencing is the absence of perishable food.

She said food costs were already triple last year's in some cases, even before the storm hit.

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“The number of people in need that we have to serve is now much higher, but the cost of supplies is also higher, so we are feeling the pinch from both sides,” he explained.

And while gas prices are down from their summer peaks, with a Florida gas tax holiday taking effect Oct. 1, they remain well above year-ago levels.

As of Friday, the median price for regular unleaded gasoline in Florida was $3.39, according to the American Automobile Association (AAA).

That's about $0.33 more than last September.

Holly Nugyn walks through her flooded neighborhood on September 29, 2022 in the aftermath of Hurricane Ian in Fort Myers, Fla. Steve Helber / AP

This week, Costco executives warned that they were seeing higher wages among suppliers — costs that will ultimately be passed on to consumers, in some cases.

"Salaries are still the culprit," said chief financial officer Richard Galanti, adding: "We'll try to get them off the ground, but I'm sure some will stick and some won't."

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It's also likely to be harder - and more expensive - to find skilled labor to help with the rebuilding process, according to experts.

While the global economic slowdown may be easing the cost of materials, Florida remains in the midst of a construction boom, according to Rusty Payton, CEO of the Florida Home Builders Association.

“They already have many projects to do.

You're not going to see a mass migration of people "to Southwest Florida," Payton explained.

Lowney predicted that labor costs may jump in the short term as construction contractors ration their services. 

"In other words, they will raise their rates as much as the market allows," he said.

On the other hand, with demand for jobs in Florida at an all-time high, those who have been displaced from their jobs by the storm will likely find jobs more quickly than in other post-disaster periods, Lowney said.

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"It will be less stressful if people don't have to worry about being unemployed," Lowney said.

At least one local state official estimated Thursday that it would take a decade to rebuild areas hardest hit by the storm.

"This is more like Katrina than the Florida storms we're familiar with," state Rep. Spencer Roach, who lost his home in the storm, told FloridaPolitics.com.

"There's a different level of devastation and recovery, and it's going to impact a lot of people," he added.