The price of lumber has taken a few sharp turns over the last two years.
Today’s post is by Patrick Quinn a Procurement Specialist at SafeSourcing Inc
The price of lumber has taken a few sharp turns over the last two years. A halted economy in 2020 saw a dramatic increase in the price of lumber from March to May, followed by a steady decrease in price from May to July. The price remained relatively stable from July to November, but since December, the price has seen a sharp increase from $534 per 1000 board feet to $1,420 per 1000 board feet. The National Association of Home Builders cites several factors such as supply chain bottlenecks, new tariffs, low production, and supply issues caused by flooding in British Columbia and Washington.
However, several of these factors still don’t quite add up to a near tripling of the price of lumber. Tariffs from Canada are rising from 9% to 17.9%, but that’s still less than the 20% tariff implemented from 2017 through December 2020. Flooding issues only affected the area’s production for a short time in November, too. The difference can be found elsewhere than what the NAHB are saying, though.
During this time, the revenue increase of the home improvement industry has increased $13.4%. One of the top home improvement companies awarded a pay increase for top executives over 40% just before this price spike. A different company also doubled the pay of its top employee. And despite consistently high industry revenue, the gap between consumer cost and profit never saw any change. The largest change in cash flow consistently lands in the same pockets.
To help you find the source of your rising costs, please contact a SafeSourcing Customer Service Representative.