Market Update – December 14, 2021

It should be a relief that we are winding down the most turbulent year our industry has ever known. I wish that were the case. An historic run up for lumber and panel products that no one could have predicted followed by an unprecedented fall, as equally unpredictable, sent stress levels through the roof for many of us. But it’s becoming apparent that the continued instability in the supply chain is going to continue to wreak havoc well into 2022 and provide little reprieve. The severity of the swings in the lumber and panel market, along with the increase amounts building material manufacturers are announcing, have reached levels difficult to deal with. These fluctuations are regularly exceeding levels that not only can eat up the profit on a job but also cut deep into your own pocket. Limiting the shelf life of a quote or including a disclaimer allowing you to reprice under certain circumstances are necessary safeguards for these times, especially since most have solid work files and longer than usual lead times.  I realize this sounds condescending, but it bears mentioning given everything we’re seeing.

 

The U.S. Department of Commerce recently decided to double tariffs on lumber coming in from Canada from 9% to 17.9%. The NAHB fought this to no avail. Heavy rains in the Pacific northwest have affected rail lines in parts of British Columbia. Some mills have been limited to trucks only for both inbound and outgoing freight. The ongoing issues with transportation and upcoming mill shutdowns for the holidays are helping to push prices on both lumber and plywood/OSB up. All wood products will likely remain strong for the near future as mild weather through much of the U.S. hasn’t slowed the building pace.

 

Long lead times, price increases and supply/transportation problems continue in most non-lumber building materials. I Joists have been on allocation all year but have recently become even more of a challenge to get. Everyone has done a great job trying to stay ahead of their needs which has been a big help. Considering solid sawn lumber or floor trusses might be a good option for some. Anything steel or aluminum are also especially concerning right now. The gypsum companies are attempting to push through a 30% increase (that’s roughly $4 on a 4×12 sheet), but it will likely end up being about half that amount. Windows and doors along with cabinets continue to experience long lead times.

 

These increases have made us all become numb to higher prices. Many were pleased when the box stores lowered their OSB sheathing prices to the low to mid-teens. But it was just a couple years ago we all thought $14 per sheet 7/16” an abomination. It’s unclear what the new normal will look like but it’s almost certain that some things will never be the same.