JULY 2023 BUILDING MATERIAL MARKET REFLECTION
The strong market conditions we saw in June continued into the first two weeks of July. But as the month closes the markets seem to have topped out. Mills that were curtailed have come back online, and forest fires are currently under control, giving some added supply and downward price pressure.
New Residential Construction Press Release (census.gov)
Monthly Housing Starts and Other Construction Data Tables | CMHC (cmhc-schl.gc.ca)
Lumber prices showed some modest follow through from last month’s run-in pricing. 2×4 (+4%) and 2×6 (-1%) and 2×8 (+7%) and 2×10 (+7%). Studs were also up slightly (+3%) on 2×4 with 2×6 remaining flat (0%). Mill order files are two weeks or sooner on most items.
OSB continued its surge. Showing increases of (+25%-33%). Pricing seems to be topping out as we head into August. But with mill order files pushing into September, we might not see price concessions until later in the month.
Plywood prices showed some follow through in July up (+10%), But the market feels softer heading into August. Mill order files are dwindling so we can expect a retreat in pricing in August as demand seems to be slowing.
Truss orders continue to come in at a decent pace. We have heard of some EWP supply issues hitting some markets with extended lead times on orders.
The supply chain continues to be particularly good in most products, outside of the odd logistical issue most products are arriving on the scheduled delivery dates. We have seen some delays on hardware products due to the Port strike in B.C. With that being resolve it may take a couple of weeks for supply to catch up.
Looking Through the Crystal Ball
With mill production coming back online after their shutdowns and forest fires currently under control. The factors that initially caused the market to run last month seem to be the same factors that are causing some softness as we head into August, could we retreat to April / May levels? With interest rates continuing to rise all the above factors are seeing buyers move forward with a cautious approach. There is a bearish tone to the market as we head into the 3rd and 4th quarters of the year, as some worry that inflationary pressures are finally gripping most of North America.