The COVID-19 pandemic has disrupted almost every sector of the global economy, and the lumber industry is no exception. The pandemic triggered a construction boom, leading to a surge in demand for lumber, and causing the price to rise. That, coupled with the shut-down of lumber yards made the price of even the most standard lumber items continue to go up, hitting astronomical figures.
Why is the Price of Lumber Skyrocketing?
The current demand for lumber and its products far outshines the supply. At the start of the lockdown in March of 2020, many homeowners spent their time carrying out long overdue home improvement projects – both DIY as well as professionally hired. Once the pandemic hit, lumber mills were among the major businesses to shut down to prevent the spread of the virus.
Consequently, the existing lumber inventory was quickly depleted, and restocking was a menace. At some point, there was less than 10% lumber available to meet the market demand. With the severe disconnect in supply and demand of timber, the prices hit the roof. In some areas, lumber prices have gone up by 50 to 100%.
Impact of the Soaring Prices
The housing sector has been hit hard by the crazy lumber prices. To start with, we as contractors had to adjust our expected timeline to finish projects, due to delays in finding enough materials. Many contractors buy materials as they go, so shortages caused major disruptions for many smaller contractors with fewer industry connections. One of the benefits of working with Tom Curren Companies is that we’ll source all materials for you, before the job starts. During the pandemic, this was a major advantage, because we weren’t halted mid-project by any material shortages, like many other contractors were.
The price of construction projects has also skyrocketed as builders and contractors factor in lumber’s high price. The cost of timber slashed profit margins by a significant percentage, translating to clients paying more for work done. On the other hand, some materials didn’t skyrocket quite as much, so you may be able to get something different but equally beautiful, at a relatively lower price.
In August, the National Association of Home Builders wrote to the government seeking their intervention in the lumber crisis. At the moment, there’s nothing substantial that has been done to help correct the situation. The prices may continue to surge. However, as supply chain routes continue to open up and the demand slowly matches the supply, the prices may also plateau.
At Tom Curren, we are doing everything possible to keep our clients updated on lumber prices, and making sure our estimates are reflective of what’s available to our clients at the time. Contact us for any clarification or questions about your project!