August proved to be a difficult month for the lumber market, as extreme heat, summer vacations, wet weather, and a general pause in the action all played roles in slow sales on the retail level.
On the wholesale level, mills didn’t fare much better as they were greeted with crickets when they came back online from their annual shutdowns, and this was especially disappointing to them as most had closed for an extra week in the hopes that dealers would be starved of material and the subsequent demand would keep prices propped up. Instead, they were greeted by apathetic buyers who didn’t express much interest but to buy just enough stock to fill holes in their inventories. Prices eroded but, as September inched closer, they slowed their downward trajectory and firmed as a more optimistic attitude toward fall business grew stronger and brought out more sales. This was likely instigated by a favorable U.S. housing starts report (July housing starts in the US rose by 3.9% month-over-month, above The market will undoubtedly move from floundering to flourishing again but, as of print, there doesn’t appear to be anything yet arising to cause this cycle to break its stride as retailers seem to be satisfied with their inventories. In the meantime, prices are still settling while material is ample, and it’s likely that we’ll see a continuation of this pattern well into Septembermarket expectations,) but enthusiasm was muted over rumors that already high mortgage interest rates could soon go higher. As availability for most dimensions remained good, price changes were modest and vacillated week to week depending upon the dimension. Nonetheless, inventories can be rapidly depleted with a sudden influx of business and the concern with that is, historically, buying for the fall season usually ramps up in September. The market will undoubtedly move from floundering to flourishing again but, as of print, there doesn’t appear to be anything yet arising to cause this cycle to break its stride as retailers seem to be satisfied with their inventories. In the meantime, prices are still settling while material is ample, and it’s likely that we’ll see a continuation of this pattern well into September unless a fall buying rally brings buyers back out on to the mat. The misplacement, misinterpretation or absence of symbols and acronyms can be the crushing financial downfall for many business transactions, so it pays to be extra diligent to know where that decimal goes, what that abbreviation stands for and, in the end, ask yourself if the price you’re looking at “makes sense”. apply to the same or very similar products.
The “Unit of Measurement” (commonly seen as “UOM” on quotes and sales orders) indicates the volume or count of an item and can be nothing short of confusing in this industry, as oftentimes different versions. For example, wood sidewall shingles can be priced and sold by the box (BOX), bundle (BDL), carton (CTN) or square (SQ) whereas clapboard siding can be sold by the bundle (BDL), piece (PC), lineal foot (LF) or surface measure (SM). On all shingle and lap sidings, the coverage for the job depends upon the appropriate exposure to the weather or desired appearance (within guidelines), so you may need (4) bundles to a square of Western Red Cedar Perfection shingles but need (5) to (7) bundles to a square of Western Red Cedar Tapersawn shingles, depending upon your situation. Most often, shingles are quoted by the square but sold by the box, bundle or carton (and sometimes by the “each”) so you have to be really careful that the amount represents the desired square and coverage needed for the job. Conversely, lap siding is rarely quoted by the square, so whatever quantity and unit of measure needed to cover your project often requires some calculation of the exposure to determine the correct amount. What is often not seen (and can further complicate matters) is the manner that the industry prices out many items (lap siding and lumber, for instance), in which a factor of a thousand dollars (“$/m”) is used to calculate a cost. . A throwback to buying lumber in thousand board foot volumes, a cost is achieved by calculating the nominal dimension of the item (for example, a 2 x 4 x 8 common stud, factored in Thickness, Width and Length, or 64) and dividing it by 12, giving you the board footage that that particular item contains. In this example, 64/12 = 5.33 board feet, which is how many board feet are in a single 2x4 -8’ stud. The board footage factor (5.33bf) is then multiplied by the “thousand board foot price” (which, for example only, we’ll use as $776/m, read as “776 a thousand”) and then divided by 1000 to arrive at the cost of the item which, in this case, is $4.14 each. Note that there isn’t a decimal point in the thousand board foot price: the “m” (which is an abbreviation for “mille” (Latin for “thousand”)) signifies how many places to the left (3 places) you must move the “invisible” decimal point. There are other ways to calculate this (for instance, 5.33bf x .776 = $4.14), but you need to be confident of the figures, their decimal placements and the units of measure. As you can see, it’s complicated but now that you have had a heavy dose of acronyms, units of measure and confusing means to an end, we hope that you can appreciate how important it is to pay attention to these seemingly innocuous bits of data. To err is human so one little oversight or fat-finger entry can make the whole thing wrong. Incidentally, one of the big “tells” that something isn’t right is when an extended price doesn’t make sense, meaning it’s too cheap or too expensive from a logical or experienced point of view: if it doesn’t look right, it’s best to question it at the onset. While it is always a challenge on both sides of the table to ensure that documentation is right to your request, it’s worth taking the time to analyze for accuracy the numbers and their units of measure as we are often dealing with large sums that are particularly unforgiving if they are incorrect.
Building materials and construction in general is a difficult study, and both take an awful lot of experience and time to know the who, what, where, why and how’s. Please turn to us to be your “who” and “where” for your “what” as our deep bench of knowledgeable and experienced industry professionals are at the ready to service you for your building material needs. Thank you for your business!