Though things may get off to a slightly slow start in January, lumber industry experts say demand will likely pick up in the Spring of 2019. ProSales reports that consultant Matt Layman, the creator of Layman’s Lumber Guide, is feeling optimistic about the upcoming season even as economists ponder a possible recession in the overall economy.
“According to Layman, the lumber market will trade indecisively in the penultimate week of 2018, leading to impatient buyers and curtailed production. This will create higher lumber prices during January 2019 and lower builder lumber demand. However this weak projected month will not be enough to prevent a stronger start to the spring months next year.”
Layman also predicts that lumber demand will be very strong in Q2 and Q3 “compared to a noisy and volatile first quarter.”
Sawmills have been running at high capacity as buyers consume more and more wood, leading to higher lumber prices. Q3 of 2018 experienced a slight slowdown after an unexpectedly robust Q2.
Meanwhile, contractors are ending 2018 on a high note and feeling cautiously optimistic about the calendar year to come. Spending growth has been strong and well-balanced among residential, private nonresidential and public projects. Employment i the industry rose 4.9% between October 2017 and October 2018, and more than three quarters of the 2,552 firms surveyed by the Associated General Contractors of America expect to add workers over the coming year.
The biggest challenge, it appears, is finding workers, particularly hourly craft workers. Ken Simonson, chief economist for Associated General Contractors, says the unemployment rate for jobseekers with recent construction experience dropped to 3.6% in October, the lowest October rate in a series dating to 2000.
