Peninsular Lumber Company


Why Did the Pandemic Cause a Lumber Shortage?

By / buying lumber, Custom Home Building, DIY projects, Lumber Prices, types of lumber / Comments Off on Why Did the Pandemic Cause a Lumber Shortage?

Learn why the COVID-19 pandemic caused a nation-wide lumber shortage.

The onset of the COVID-19 pandemic led to supply chain disruptions that made transporting goods difficult and left many commodities in short supply. However, what surprised many was the lumber shortage that skyrocketed lumber prices.

The shortage was so pronounced that prices reached an all-time high of $1,711 per thousand board feet in May 2021.

So, to better understand what is driving high lumber prices, read on to learn more about why the pandemic caused a lumber shortage. As you will see, the whole situation is a classic example of a demand-supply imbalance. With low supply and high demand, it was inevitable that a lumber shortage would occur.

Low Supply

Sawmill Production Capacity

Unsurprisingly, many sawmills closed or temporarily halted operations at the height of the pandemic due to lockdowns and the economic recession. Those who re-opened later had to adjust their operations due to newly imposed restrictions. Lumber production was much slower at first, causing the supply to be lower than normal.

Labor Shortage

Another major bottleneck that constrained supply was the labor shortage. Staffing became a huge problem in all industries during the pandemic, but the impact was particularly bad on the lumber industry. With workers reluctant to return to work due to the threat of the virus, it was hard to scale up production to meet the demand.

To make it worse, the labor shortage was prominent in all supply chain stages, from logging to mill production to transportation. It meant delays and supply constraints at every step, which led to a huge shortage.

Supply Chain Disruptions

To top it all off, mobility restrictions put a strain on exports, which further contributed to the lumber shortage. For instance, the US imports a large volume of Canadian lumber each year.

However, Canada was not immune to the impact of the pandemic, and local sawmills also reduced production capacities or closed completely. It meant lower export volumes—and even then, it took longer to transport the lumber due to supply chain disruptions.

Environmental Issues

More recently, the dynamics have changed a bit. In the latter part of the pandemic, the lumber shortage was aggravated by unforeseen environmental issues. These include the massive floods in British Columbia and wildfires in the US, which led to lower lumber supplies and delayed shipments from Canadian ports.

High Demand

Housing Demand

One of the most unexpected things to come out of the pandemic was a surge in housing demand. Many assumed that the housing market, which largely influences the demand for lumber, would decline. After all, it only made sense that people would cut back on spending during a global recession.

However, as it turns out, the lumber industry misread the situation as people saw it differently. With mortgage rates hitting an all-time low, they saw it as an opportunity to invest in affordable housing. Home builders quickly ramped up their efforts, causing lumber demand to increase significantly.

Surge in Home Improvement Projects

Aside from the huge increase in home sales, home improvement projects also rose to record levels as people spent more time at home during the pandemic.

Many used this time to renovate their place by adding home offices or installing pools and decks. Similarly, others have started hobbies like gardening, which require lumber for DIY projects. The lumber industry was not prepared for this massive surge in demand. Combining this with the supply constraints and the real estate boom, a lumber shortage was all but inevitable.

Get High-Quality Lumber for Your DIY Projects Today

If you need to source lumber for some upcoming DIY projects, Peninsular Lumber can help you out. We are your one-stop shop for lumber in the Tampa Bay area, with the widest selection of lumber and building materials around!

Whatever your lumber needs may be, we can guarantee that we have it! Call us today at 813-875-8805 to get in touch with our expert team and visit our lumber yard!