April29

Lumber Market Update – May 2019

By Paul Rogers

April lumber sales were, surprisingly, oddly calm, with very little movement in pricing (and quite unlike last year’s maelstrom of exorbitant price increases brought upon by excessive demand, shortages and trucking issues). Demand this year was steady, and lumber buyers were able to enjoy taking advantage of some good deals as mills were trying to move out their inventories and build order files. In terms of deals, an influx of aggressively priced “Euro wood” (European SPF, well-known for its high quality) hit the East Coast ports and was quickly snapped up by reputable lumber yards who couldn’t pass it up, whether they needed it or not. This was much to the dismay of the Eastern mills, who got aggressive with their offers but still had to grudgingly accept counters in order to secure the sale. Although some Western dimension stock got a little tight, there appeared to be enough inventory on the open market. As the month progressed, more lumber buyers chose to bolster themselves against anticipated spring business, but the buying did little to pull pricing away from riding a flat line. Nonetheless, all good things must come to an end and it’s appearing that a change in the market may be upon us soon, if conditions allow. Weather improvements, a new cycle of building, and depleting inventories will likely call buyers back in to action. For May, we expect a latent uptick to sales and expect for pricing to be firm to up, but only moderately so. Inventory levels are still reported to be somewhat healthy at the retail level and so replenishment will likely be conservative as we progress through the month.

Although it’s not a new topic, there remains a grave concern that a labor shortage, in all sectors of our industry, continues to limit productivity and ultimately sales, impeding our industry and slowing the economy. It’s been at the forefront of every employer’s concerns for years. There aren’t enough qualified skilled laborers in the trades and it’s difficult finding recruits because there hasn’t been enough appeal to move in to the construction or building material fields. Until more potential employees become attracted to the virtues of working in our industry, it’s up to those of us with experience to guide, mentor, and nurture the candidates that we make part of our team. Again, this isn’t just limited to field construction. Skilled help is at a shortage in all sectors of our industry, right up and through the supply chain. Like most of us know, we have to watch our inexperienced workers like a hawk. At least until they have been proven to apply their learned skills, show good judgement, and understand the implications of their job. The irony we face is that when we feel a new employee has been vetted enough to work unsupervised, we expect all to go well…until it doesn’t. Time saved by our new employee can quickly become time spent trying to fix what went wrong. When something goes awry we revisit, review, retrain, and hope we are able to contain and correct whatever damage was done. However, when this scenario is thought of in the context of
a building materials manufacturer, a new employee on the line or the loading dock could potentially let volumes of the wrong material slip out before it is caught. Unfortunately, when that happens, it can often be you, our customer, that is calling it to our attention. Many of the items we buy are received wrapped and shipped to you and/or may be off by a small but critical fraction. A few examples from years past are studs cut too short by an eighth of an inch, AC plywood wrapped and grade stamped as CDX or R&R white cedar shingles not cut square. It’s bad enough getting product that is wrong, but it’s even far worse when it’s installed. Once it’s at that stage, no one is going to walk away with a happy experience. Humans make mistakes and it’s a part of life, but it becomes an even bigger part of life for any of us who are dealing with new employees (and especially when business is cranking). We put the onus on ourselves to verify the accuracy and quality of the materials we receive, pick, and deliver to you. We do it to the best of our ability (sometimes to the point of driving our suppliers crazy). However, we cannot overstate how important it is to check your materials for accuracy before you install them. It will be well worth your time to pull out the tape or square and spot-check before you cut or fasten. In an industry that is so short-handed, busy, and tight-scheduled it’s a peace of mind that is invaluable (especially when you consider the ramifications of having to do it twice).

With all of our years of experience in dealing with products, we have learned to never shoot down an initial claim, thinking that it just can’t be the case. We know that just about anything is possible. But you have our assurance that whatever the situation may be, we will react to it with an uncommon sense of urgency and work to correct it to the very best of our ability. We appreciate your business and realize your tough position in the field, and are dedicated to making your experience with us as favorable as possible. Thank you for your business.

Paul Rogers, Purchasing Manager

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