April 2015 – Market Update

By Paul Rogers

The effects of the epic snowfall and frigid temperatures we received in recent weeks had left the market starved for business and, in some cases, for material as well. As work generally ground to a halt, buying was limited and inventories quickly grew. In contrast, there were many cases of material outages that were attributed to inaccessible railcars. The heavy snowfall and freezing temperatures wreaked havoc on railways (a prime example would be the MBTA) and so there was an extreme backlog of inaccessible cars that could not be unloaded. West Coast products, such as plywood and wide width, long length framing were stuck on the tracks for weeks. The lost business days spurred desperate offers from traders and distributors to try and offload their inventory into dealer’s yards, all while the market was slowly sinking. As the weather drove the market down, traders were continually snapping up blocks of stock in the anticipation that the market was at bottom and would soon recover, but subsequent weeks only proved that there was more to go. As of print, inventories are pretty high across the supply chain as the thaw has allowed transportation to rebound. Sales are sporadically responding, and so the market is bouncing along the bottom.  The general anticipation of most is that we’ll be in for a busy spring and so pricing is expected to firm up in April. However, that will depend upon the ability of dealers to sell off their current inventory.

The industry had an optimistic outlook for 2015 business, even before all of the bad weather. Now that spring has officially begun and the threat of job-stopping weather is behind us, this optimism has taken on a more urgent and nervous tone, as repairs and rebuilds caused by the storms has added to the already swollen backlogs of work. The damage caused by ice dams, roof collapses, and wind and flooding has affected homeowners who had never had a problem before. More notably, it has highlighted the necessity of good home building practices, such as the use of ice and water barriers, the application of proper fasteners and the correct sealing and insulating of homes. As building codes have changed to enforce such practices, seasons like this last one highlight the reasons why we must adhere to the proper construction methods. That being said, poor construction practices of old (a serious misfortune to the home-owner in any circumstance), will create a boon to our industry as repairs and rebuilds get under way. With the trades already being understaffed, code officials will have to be extra diligent to ensure that corners are not being cut by uneducated or time-constrained builders. With the new building codes, materials and technologies, it is a difficult time to be a builder, but we can clearly see the reasons why these changes were implemented years ago: ensuring a safe home environment is critical to everyone’s welfare.

We recognize the fact that our customers have a tremendous amount of responsibility to do their jobs right, and we want to be a key component in helping alleviate some of that responsibility by offering you our assistance, when needed. Manufacturers can oftentimes provide confusing documentation and, in turn, dismiss issues that arrive if installation and care practices weren’t exactly followed. Please reach out to us in the event that you need clarification on any of the installation or care instructions required for the products we sell, as we want to help ensure that you have a successful experience.  Remember, it’s always wise to measure twice and cut once, so let us do the double checking for you. Thank you for your business.

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