Prices on lumber and sheet goods have steadily risen over the past year while inventory has declined. We checked in with some suppliers and they expect things will remain tight for some time.
As our survey of the impact of the coronavirus pandemic showed in February, more people stuck at home have taken on home renovations – building decks and fences, playhouses for children, upgrading kitchens, installing at-home offices.
At the same time, the pandemic disrupted supply chains because many sawmills and lumber processing plants scaled back operations due to COVID restrictions. That forced logging companies to cut back. Some think the lumber supply chain has started to get back into full gear.
However, the over-heated housing sector has increased demand for lumber and sheet goods in both Canada and the U.S.
Statistics Canada data for the period from March 2020 to March 2021 shows an astounding 118% increase in softwood lumber prices. Kevin Lee of the Canadian Home Builders Association says the higher prices add an additional $30,000 in lumber costs for an average Canadian home.
And it’s not just dimensional lumber and sheet good prices that are going through the roof. KJP Select Hardwoods has seen a slow but steady increase in the costs of domestic hardwoods and exotic species. To this point they’ve been spared from the unprecedented pricing and supply issues seen in the construction industry. But, according to KJP, “that time seems to be drawing to an end. In the first quarter of 2021 we had already seen hard maple eclipse its all-time high in cost. Now walnut, white oak, and even poplar suppliers are threatening very real inventory issues for the rest of the calendar year.”
Even specialty plywood is being affected. For the first time in their 15 years, KJP estimates they will run out of Baltic birch plywood at some point this summer.
Meanwhile, the pandemic also created chaos in global shipping, bureaucratic handling, and virtually every layer of transport and processing. As an example, Mys-Teak Holdings Inc, a company specializing in quality responsibly grown teak, imported a container of teak lumber that ultimately was delayed four weeks at sea and a further two weeks by customs exams made less efficient by the pandemic.
Market analysts say that eventually the lumber market will clear, prices will stabilize and supplies will get beck to normal – but when is hard to forecast.
Whether you buy now or wait, you’ll want to lock up your lumber – it’s scarce and expensive.