The high price of petroleum has sent the cost of roofing materials soaring skyward and hitting the bottom lines of roofing material suppliers and contractors.
Both have been forced to cut their margins to attract customers during the current economic slowdown and withering market for new residential construction.
John Eenigenburg, owner of Dyer-based Eenigenburg Roofing, said material costs keep going "up, up, up."
"We can't keep absorbing increases," he said. "It was something that could be absorbed, and in '07, a lot of contractors did. Some suppliers have cut their margins. Petroleum affects the price of shingles and the transportation of materials. It has taken a big bite out of the profit margin of everybody."
With 90 percent of roofing materials, including asphalt shingles and felts, made of petroleum, the cost of materials for an average 1,200-square-foot roof has increased dramatically since January, said Rob Cantwell, manager of Hobart-based Gary-Hobart Roofing Supply.
"Prices have been going up for two years, but it hit really hard this year," Cantwell said. "The trend line is steeper. We've had three increases, this year totalling $12 a square of shingles (100 square feet.) That's about a 30 percent increase."
The roofing materials distributor hasn't yet raised the price of felts and paper, which are used under the shingles, but that is expected to change if petroleum prices stay above the $100 a barrel level.
"We haven't raised their price, but we'll have to," Cantwell said. "We stocked up enough that we're holding the price as long as possible. But shipments are up $3 to $4 a roll from the beginning of the year. That's a 25 percent increase."
Dick Copper, one of the three owners of the Gary roofing company, Charles Gluth & Sons Inc., has been in the roofing business since 1968. This year is second only to 2005 as the worst he can remember for the business, he said.
"Right now, we're still hanging in on commercial and industrial work," Cooper said. "New residential has dropped 40 percent since this time last year. On older homes we're down 20 to 25 percent because of the shape of the economy."
Material prices are slated to increase again at the end of the month.
"Across-the-board, we're looking at a 5 to 10 percent increase," Copper said. "Then, there's a surcharge on deliveries that depend on the price of gas. It's $15 to $18 on a load, which doesn't seem like much, but when you add it up, it's a considerable amount. We're getting hit from all sides so we have to pass it on to the homeowner and business owner."
Eenigenburg contends the "redo" roofing market still is strong.
"People still need roofs," he said. "The new construction market is pretty dry, but over the last few years there have been numerous hail storms in Northwest Indiana that damaged roofs, and they're being done."
Copper said it "probably" is a good time to have roofing work done, because things are slow.
"Consumers could get a better deal if they would get two or three prices and find someone who needs the work."