December31

January 2015 – Market Update

By, Paul Rogers

As last year came to a close, business remained spotty as the week-ending holidays and an already poor weather pattern had their effect on sales. Many builders made it their goal to get their projects up and weather tight before the end of the year, so the framing, roofing and sidewall categories saw the majority of activity and this brought welcome relief to the dealers who were trying to move their “big ticket” items before the end of the year. As a growing trend, many businesses have been running down their inventories at year end in order to prepare for annual inventories and/or to reduce the risk of a tax penalty that is based on inventory values (the “Uniform Capitalization Rules”). These are great incentives to dealers to pare down their inventory as much possible, so little is purchased right up until the end of December. However, immediately after the New Year, truckloads of material hit the ground and give the market a quick rush as dealers desperately try to replenish their inventories. This pop in business has become a historical norm, but a faltering in the weeks afterward also typically follows as dealers will tend to overbuy on the premise of stock shortages caused by annual mill shut downs. Looking ahead at the next thirty days, we can expect to see a bump in pricing early in the month and likely a flattening out as the month progresses (but especially if demand stabilizes or drops due to inclement weather).

According to a recent article in the Random Lengths Weekly Report, an annual survey conducted in November 2014 of retail lumber yards across the nation has shown that there is greater optimism towards the upcoming year than in years past: 6 out of 10 dealers are anticipating growth in sales and company profits in 2015 over 2014. Overall, this is good news but it was noted that New England “trailed other regions by a wide margin”. We’d rather not think of this as a negative measure of optimism from our counterparts but more one of realism but, in any event, optimism is driven from a positive attitude and, as you are well aware of, we believe wholeheartedly that attitude (especially a positive one) is, indeed, everything.  Regardless of what the market is doing or what the big picture looks like, there is always opportunity to improve and grow, but it starts with a positive thought first: “Attitude is a little thing that makes a big difference.” – Winston Churchill

Most of us are still fresh from making our New Year’s resolutions and committing to an improved well-being, but we want to impart to you that our attitude towards our growth this year (and every year) is very optimistic and it stems from the fact that we are eager to be your #1 building materials resource and are willing to work very hard for it. In kind, we want to encourage your business growth as well, and hope that you are able to take advantage of the many opportunities that we offer, not only in terms of quality product and outstanding service, but also through our professional events, such as our company sponsored AIA meetings, Contractor Nights, Cookouts and the many other venues that we offer throughout the year. We appreciate your business and are looking forward to being a part of your success this year!

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