fbpx

Call Us: Baltimore: (410) 675-4740    |   Chevy Chase  (240) 858-1001

Categories
Uncategorized

Why Builders Should Plan Ahead in 2022

Back in summer 2021, you could be forgiven for thinking that the building materials market was finally settling back down and approaching some sort of normal. However, as the new year begins again, it’s apparent that things are more chaotic than ever. That’s why our message to our valued building partners is this: let’s work together and plan ahead so that we can all have a successful building year in 2022. 

In this blog and accompanying video, we continue our efforts to keep you updated on the state of the supply chain for the construction industry, and market fluctuations for lumber and other building materials. Please keep in mind that while we try to keep this information as current as possible, the situation is evolving day by day and what’s accurate today may not necessarily be reflective of the situation tomorrow. 

The Current Market Situation

The market is again undergoing rapid fluctuations, with price spikes and limited product again arising at the end of December. In summer, the situation seemed to once again be on the track towards steady prices, but due to another winter COVID surge, struggles are being felt across the industry. Again, the same culprits are emerging. COVID spikes lead to labor shortages for lumber mills and product fabricators, a trucker shortage leads to extensive transit delays, and all of these issues coincide as housing demand remains high. 

What was once a lumber problem has seeped into the entire building material supply industry. Prefabricated materials such as cabinetry, windows, and doors are facing pricing uncertainty and massive production and delivery delays.

The situation in the industry has been volatile and has the potential to change again without notice.

The Inflation Effect 

One aspect that has significantly affected the lumber market are issues of inflation. In our video highlight, you can see a practical example of how the pandemic has changed lumber prices, even despite recent declines in cost. This comparison shows what $2,000 could get you in the material in February 2020, just before the start of the pandemic, vs what $2,000 gets you in February 2022. As you can see, the difference is quite substantial.

Prices began to spike in April 2020, and have not dropped down to pre-pandemic levels since. Even within the last year, we’ve seen progress reversed and prices skyrocket once again. Since September 2021, prices have risen 45% for lumber and other materials. These fluctuations are not within the industry norm. In fact from 1950 through 2019, lumber prices changed marginally (10-20%) each year. We are now seeing prices fluctuate by 4% every single day. This unprecedented uncertainty and inflation are creating difficulties for builders. It’s our goal to help you plan ahead and meet challenges as they come. 

Allocation and Lead Times

When high demand and limited product coincide, it creates a scenario where manufacturers begin limiting purchase amounts and dole out significant lead times. Several specialized product types are on allocation from various manufacturers, particularly cabinetry, windows, and doors. This allocation process feeds into significant lead times for builders. Window and cabinetry products that used to take 4-8 weeks to ship are now taking as long as 16-20 weeks. These allocation and lead times challenges truly highlight the need to plan ahead in 2022 more than ever. 

Transportation Challenges

Supply chain difficulties have been felt in industries across the globe. And one substantial cause is the lack of accessible transportation as the pandemic again surges. Pandemic-driven delays have exacerbated a years-long trucker shortage. As highlighted by Vox, “the United States is experiencing a shortage of more than 80,000 truck drivers, according to an estimate from the American Trucking Associations. The ATA also estimates that about 72 percent of America’s freight transport moves by trucks.” This mismatch between large amounts of freight moving by truck (especially true in the case of the lumber industry) and a shortage of truckers is a recipe for logistical disaster. Truck companies are attempting to remedy the challenges, but are facing supply chain limitations of their own. As Business Insider discovered, “less than a month into the new year, some dealers say they have already sold out of new semi-trucks for 2022.

While transportation limitations are frustrating, National Lumber works hard to ensure our end is properly managed. We maintain a fleet of local delivery vehicles that get your products to you directly at the job site. At National Lumber we have an open roll call for qualified drivers to join our fleet, and we’re targeting an expansion of available vehicles in 2022. We strive to provide top-tier delivery that gets your products to you on time as soon as possible. 

What You as a Builder Can Do

While the challenges seem significant, there still plenty of steps we can take to ensure 2022 is a successful year for the building industry. Our mantra through the pandemic and into 2022 is this: prioritize communication, plan ahead, and work together. Our sales team is here to help you address challenges as they arise. Whether you need to find a great replacement material, want to plan ahead for projects later in the year, or simply want an update on prices and the availability of materials, we’re always just a phone call away. By working together and planning ahead for the rest of the year, we can all continue building incredible projects together.

To get started on your next project, reach out to the National Lumber team today.