Got Wood?

A lumber frenzy has taken over homebuilding, Home Depot, and the internet.  A Peter Gercke/picture alliance/Getty Images image via Vox.

— News covered by Quincy Quarry News with commentary added.

An MBTA toilet paper supply security chain
A Quincy Quarry News file photo

Got wood?

Think last year’s COVID-19 pandemic-fuelled toilet paper shortage was bad? 

Check out the lumber inventories at home improvement stores and lumberyards.

After a decade of sagging demand that in turn lead to lumber mill closings, stir-crazy homeowners’ remodeling projects and an uptick in residential construction have given rise to as much as five-fold increases in lumber prices as lumber consumers bid up prices.

How bad are things?  Not only are lumber prices soaring, so too is the number of memes making fun of the situation.

The problem is not a lack of trees.  For the most part, there are plenty of trees available as they continued growing during the decade after the Crash of 2008 crashed new residential housing construction rates.

Rather, the crux of the problem is that many lumber mills closed up given hard times after the crash and thus lumber mill capacity to process trees into 2 by 4’s and chipboard sorts of products as wood sheds that took a beating.

Domestic new housing starts over the years
Federal Reserve data via Vox

So bad a beating that but a middling 80% rebound to new housing units construction rates of fifteen years ago has given rise to an unprecedented bidding war that has, in turn, yielded an unprecedented many-fold increase in lumber prices.

Further troubling, not only is it going to take a while, if not a long while, for supply to better reflect demand and so result in prices moving towards a new normal more in line with historical prices, all manner of other products’ supply chains are facing similar disruption.

In short, pervasive inflation would thus appear to be well along as opposed to merely lurking in the woods as well as further fueled by the exacerbating impacts of excessive economic stimulus policies and programs emanating out of Washington DC.

That and a likely hampering of new construction given that the prices of other construction material items are also soaring.

Supply chain trainwreck
A Lévy and Sons photo

Further, COVID-19 has laid waste to offshore supply chains for all manner of other products and this will continue to make a mess of things for most everyone until such time as COVID-19 infections might abate and things might then return to new normals that are reasonably close to the old normals. 

Even worse, however, at this point, Quincy Quarry’s foreign and other affairs desk suspects that serious progress towards new normals will not happen any sooner than well into 2022, if not even later.

Source: Lumber mania is sweeping North America

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