Northeast Business
Northeast Business Trends By Cadance Hanson Staff Writer Three Northeastern lumber distributors shared a common thread regarding the state of the industry through the final quarter of 2023. Each source also had a unique perspective and regional insight into other issues they face in their markets. According to each Softwood source, high interest rates for new home buyers and the post pandemic economy resulted in slow lumber sales for the final months of 2023. The annual holiday season decline was also cited by the sources. At the time of this interview, a New Jersey lumber supplier said, “the market was in the doldrums” during the final quarter of 2023. He anticipates that the market will improve by the second quarter of 2024. “The traditional market is up in the Spring,” he said. “But we haven’t had a traditional market. The first quarter of 2024 is going to be quiet and interest rates will still be high. But I have no idea.” A Massachusetts lumber distributor said he is taking everything “day-by-day GREEN & KD LUMBER GREEN TIMBERS ROUGH OR DRESSED ATLANTIC WHITE CEDAR POPLAR OAK Continued on page 70 OVER 100 FINISHED PROFILES Inland West Business Trends By Terry Miller President QUALITY PEOPLE CREATING QUALITY WOOD PRODUCTS Inflated interest rates, an ambling housing market and the imminent wintry weather cycle were cited by industry sources as culprits in the lukewarm final quarter of 2023. • Interest Rates Calling the current market “God awful,” a Montana lumberman narrowed down the source to growing interest rates, which many believe has made customers reluctant to build houses. “It is basically the interest rates,” he said of the industry’s slow fourth quarter. “And people lacking the confidence in the economy going forward.” An Arizona lumberman agreed. “In my lifetime, I’ve never seen interest rates go from two-to-eight percent in nine months,” he said. An Idaho source added that the wood distributors were “hand-to-mouth and trying to pass (that mentality) on to their customers.” While many lumber sellers are optimistic about turning the corner into 2024, others aren’t as confident. “Things will pick up in the first quarter of 2024,” said the Montana source, “but that is only seasonal. And that’s not regional, that is national.” DISTRIBUTION NATIONWIDE & INTERNATIONALLY 252.357.0116 681 NC HWY 37 S. GATESVILLE, NC 27938 WWW.GATESMILLING.COM According to the Arizona lumberman, “We’d like to see the first quarter go up.” “But we don’t really think that it will,” he said. “I think we are possibly looking more at the second quarter before we start to see an uptick. We see the cycles and go through it,” he added. “The thing about this one is that we’re still in the post COVID world.” According to the U.S. Department of Agriculture, timber prices began to rise in late 2020 and 2021. During the first year of the pandemic, prices of processed wood products, such as Softwood lumber and plywood, nearly quadrupled. • Inventory Costs At the time of this writing, sources acknowledged that they were keeping a low inventory through the final quarter of 2023 to “save on inventory tax.” “Everyone is letting inventory wind down to the end of the year to save inventory costs,” said the Idaho lumberman. “Everyone is staying tight. The mills want to be smooth and tight. Everyone has tucked into the holiday schedule. That is pretty normal.” The Montana source, who focuses on building and industrial items, noted that there is “so much wood out there that you can’t believe it. “There is too much production,” he said. “It is just supply and demand. That’s pretty simple. But until you can instill something in the consumer (to make them buy) then it’s not going to happen.” • New Housing Another factor that stung the Continued on page 70 Page 42 Softwood Forest Products Buyer • January/February 2024 C M Y CM MY CY CMY K 1x4; 6’ STK; Cedar Tongue & Groove 2x2 Balusters PRODUCTS WE MANUFACTURE: Nursery Boxes • Shipping Dunnage • Stakes Lath • Gate Material • Tilt Stickers • Lattice • Trellis sales@woodwayproducts.com | (503) 631-4408 Cedar Tongue and Groove Bowers Forest Products offers superior quality products for every home and garden project. Bowers Forest Products has been manufacturing and supplying quality products for over 20 years. Visit us today at bowersforestproducts.com and woodwayproducts.com or call us for more information on all of our newest products. BOWERS FOREST PRODUCTS Catalina Estate Lattice Lattice Panels First Class Customer Service with Integrity
