Lumber slides as surging inflation hammers DIY renovation market
BNN Bloomberg
Lumber prices are slipping to levels seen four months ago as soaring inflation curbs the appeal of do-it-yourself renovators to take on costly new home-improvement projects.
Lumber prices are slipping to levels seen four months ago as soaring inflation curbs the appeal of do-it-yourself renovators to take on costly new home-improvement projects.
“The DIY sector is eroding because inflation is up,” Russ Taylor, a market consultant at Vancouver-based Russ Taylor Global, said in an interview. “Buyers are just walking away and saying ‘I’m not going to pay that kind of price’.”
Lumber futures fell as much as 8.4 per cent to US$870 per 1,000 board feet in Chicago on Monday, extending a slump to about 30 per cent since the start of March. The contract, which briefly slipped below US$850 last week, is hovering around levels seen back in early December.
The DIY sector is the largest lumber market segment, accounting for about 40 per cent of consumption, according to Taylor. Big box retailers such as Home Depot Inc. and Lowe’s Cos. represent half of the segment, with the rest coming from smaller retailers and contractor yards. Taylor sees lumber prices falling below US$600 before a slight recovery in May when supply and demand become more balanced.
Home construction and DIY projects often provide a springtime boost for North American wood prices, such as last May when lumber hit record highs during a homebuilding boom before collapsing as high prices stifled demand and sawmills ramped up production. Lumber has been volatile throughout the pandemic, with a recent peak in March fueled by lingering supply and shipment woes from last year’s floods in Western Canada, a key producing region.
