How hard will it be to get lumber in 2022?
If you have been keeping up with the lumber or housing market, you would know that the pandemic has created a massive demand-supply imbalance. While most other businesses struggled to stay afloat, real estate was booming. Many customers were looking for security by purchasing homes.
Couple this with historically low-interest rates, and it should come as no surprise why everyone was looking for a house. This massive demand for homes resulted in high demand for building materials, particularly lumber.
Unfortunately, the same cannot be said for lumber supply, which has been dwindling faster than it can be replenished. This shortage has resulted in high lumber prices, and despite some improvements in the market, the trend will stay strong in 2022.
Read more to learn why lumber will still be in short supply next year.
What is Causing the Lumber Shortage?
You can expect lumber prices to stay high next year as lumber supply remains low. This massive shortage can be attributed to many reasons, including:
Several sawmills had to cut production at the height of the pandemic due to the ensuing economic recession. Others had to close entirely since they could no longer sustain operations. While production has picked up since then, sawmills are now struggling to fill demand due to labor shortages.
With fewer people working in lower-income jobs today, sawmills cannot get enough employees to scale up their production. Many sawmills are also located in more rural areas, where the population has declined, making the worker pool much smaller. This dilemma gives the available workers leverage to ask for a higher income, which many sawmills have had to do.
The pandemic has disrupted transportation operations, making it challenging to move building materials from one place to another. The trucking industry is no exception due to higher fuel costs and extra difficulties finding qualified drivers. Also, many companies had to increase wages for drivers, so the added expenses are reflected in increased lumber prices.
Severe Floods in Canada
Beyond the supply chain disruptions caused by the pandemic, the severe floods in British Columbia have affected one of Canada’s largest lumber producers—West Fraser Timber.
The US imports around $4.5 billion of lumber from Canada, so this calamity has taken a significant hit on the country’s lumber supply. Moreover, the floods have caused blockages in highways and rails and reduced access to overseas ports. This delayed lumber shipments to the US.
High Housing Demand
One of the major—if not the biggest—factors contributing to low lumber supply is the unexpectedly high demand for houses. While real estate is currently a huge seller’s market, there aren’t enough properties listed to satisfy demand. Thus, developers are taking on more construction projects, which require a massive amount of lumber.
No doubt, so long as demand for housing remains high, demand for lumber will be similarly high. However, with all the lumber supply issues ahead, it’s unlikely that the shortage will be solved by 2022. Supply will remain a significant problem moving forward, so you can expect that prices will continue to be high as the new year approaches.
Find Lumber from a Reliable Supplier Today
If you have any construction projects like a wood deck or something similar planned out in the next few months, you might be eager to stock up on supplies. If so, Peninsular Lumber can help you out. As a top lumber company in Tampa, we offer a wide range of lumber and building materials to support your construction needs. For more information on our products, call us today at 813-875-8805, or visit our lumber store in Tampa.