As the lumber industry has ridden the waves of a difficult national economy, price wars from offshore competition and emergence of new markets have definitely taken their toll (see Part 1). Additional forces such as competitive labor add to the dilemma, but some natural consequences and surprising new developments lead us to have hope for the future of the industry.
Competitive Labor
Raw materials aren’t the only things falling prey to this price-slashing trend. Manufacturers of building products, as well as the builders themselves, are offering lower and lower prices for their work in order to compete. Work is being done more quickly in order to turn enough profit in a given timeframe; the need for speed translates into lower quality workmanship and the devaluing of American-made products.
Once the North American products reach the level of formerly poorer quality Asian products, consumers opt for the cheaper products made offshore. If quality is no longer a possibility, customers have only two basic standards for buying choices: price and availability. And thus, the “disposable” society has been formed.
Natural Consequences
The reality of tight profit margins, fewer sawmills, and time-sensitive demands on the supply chain has led to the lower quality lumber that we have today. The positive side of this is that people are starting to think. They’re realizing that the kind of opportunistic, bottom-line-only thinking that led to this mess has to change if we want something different. It doesn’t take Einstein to realize that.
While the on-hand board footage of many domestic species is about half the national norm, the lower supply will naturally cause a rise in prices. Renewed appreciation for quality is leading to acceptance of the resulting longer lead times on both lumber and millwork. The dissatisfied customers, the need to re-do projects, the too-low profits that make business pointless — all of these realities are fresh in the minds of builders. And the headaches that have come from cheaper, faster materials and workmanship are giving way to reevaluating standards. There is no other option: We know we can’t go on, not like that.
Surprising Developments
An additional factor in this whole scenario is the rise in popularity of reclaimed lumber. The perceived value that comes with this low-grade lumber with a story of its own is just the boost the industry needs. Suddenly, defects and color consistency, stability and checking, are all negligible issues. Everything we’ve believed about lumber value and grading dilemmas is suddenly turned on its head. In a market where centuries-old barn boards are considered treasures, anything becomes possible.
If you’ve been following the results of the economy on the lumber industry, take heart: It’s changing. It’s growing. It’s over the hump.
J. Gibson McIlvain Company
Since 1798, when Hugh McIlvain established a lumber business near Philadelphia, the McIlvain family has been immersed in the premium import and domestic lumber industry. With its headquarters located just outside of Baltimore, the J. Gibson McIlvain Company (www.mcilvain.com) is one of the largest U.S. importers of exotic woods.
As an active supporter of sustainable lumber practices, the J. Gibson McIlvain Company has provided fine lumber for notable projects throughout the world, including the White House, Capitol building, Supreme Court, and the Smithsonian museums.
Contact a representative at J. Gibson McIlvain today by calling (800) 638-9100.
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