With summer last year cancelled, and the prospect of spending many more months working from the kitchen table, 2020 became the year of the DIY reno. It also became the year that Americans migrated from cities and built their own homes. And as a consequence, the lumber industry in the US skyrocketed.
According to a recent Vox article, the lumber industry in the US was in sharp decline in 2019 and the expectation was that Covid-19 would push it to the brink. For 12 years the industry was in recession. Millions of sawmill workers, lumberjacks and loggers were out of work, lumber producing businesses were closing shop and as a result, the timber producers reacted accordingly. But when the pandemic struck, the exact opposite happened.
Stuck at home with time to kill, people started remodelling; they added decking, expanded their homes, built fences, shed-offices and finished incomplete DIY tasks. Those who weren’t busy updating their abodes went out looking for new ones, away from the hubbub of the cities. And spurred by low borrowing rates, and an increasing appetite for big homes, when buyers couldn’t find homes to suit, they started building.
But the lumber industry didn’t predict this trend in time, instead of ramping up, they were closing down. As the reno trend took off the producers and manufacturers were slow on the uptake. Then, hiring workers with distancing restrictions, and quarantining became difficult. So, we are in a lumber frenzy where demand is outstripping supply.
Earlier in May, the lumber futures market was at an all-time high with costs of up to $1,733.50 per 1,000 board feet. And things aren’t slowing down, futures contracts out into the winter remain over $1,000.
It seems the world is facing another summer without a vacation, and people are putting their money to good use, adding to their 2020 projects. People are willing to spend this summer to add to their decking or build that fence.
This continued demand has lead the US market to seek wood from overseas to fill the gap. The largest being Canada, but now they’re seeking wood from as far away as Sweden, with lumber imports from here rising by a staggering 1,300%. Suppliers are seeing a “buy at any cost” strategy across the board.
European timber and lumber are in high demand, with China and India showing the most aggressive demand, willing to pay higher and higher costs.
This high has to quieten at some point, and the consensus is that it will. But for now, expect to continue to see wood = wealth memes springing up across your social media, and to be paying a premium for your fence. We’re not saying “tiiiimmmmber” to the lumber industry just yet.