FEBRUARY 2023 BUILDING MATERIAL MARKET REFLECTION
There was little follow through to the late January buy in we saw. Mills tried to push prices too hard, too fast and buyers retreated to the sidelines, comfortable with there inventory position and filling in with distribution wood as needed. As February comes to a close, mills order files are depleting and they are starting to aggressively look for orders.
New Residential Construction Press Release (census.gov)
Lumber showed modest declines of 5%-7% on 2×4-2×6, Wides 2×8, 2×10 and 2×12 were relatively flat. Studs were up 5%-10% for the month. Prices remains soft with downward pressure as we move into March.
OSB continues to bounce around the bottom with no change in pricing for the past 4-5 weeks. Expect that to continue unless there is a major announcement of production being taken off the market.
Plywood was also flat the past month, but mills have reportedly sold their production out through March. Select grades are difficult to source right now and are currently trading at a bit of a premium in the market.
We are seeing truss production finally catching up as new orders have begun to soften. Multifamily projects continue to lead the way over single family. Supply on LVL and joist is back to normal conditions, and price decreases are starting to hit the market.
Most other building materials and finish products remains in good stead. Some products coming from overseas are running behind schedule. Exterior drywall is still exceedingly difficult to source. We expect to see some price decreases moving into quarter two. Most of the delays we see are due to logistics as trucks have been difficult to source.
Looking Through the Crystal Ball
As pricing continues to retreat back to January low’s it looks like more production needs to be taken out of the supply chain to find some balance. One thing to consider is it is still just February, and most of North America has been hit with unfavourable weather this month. The calendar flipping to March can sometimes give a renewed optimism to the market as we are that much closer to spring.