Midwest Business Trends
Steady Market in Midwest Though Transportation Costs Are Challenging
Chris Fehr
Marketing Consultant / Editor
Softwood markets throughout the Midwest region continue to reflect stable demand and seasonal buying patterns. While many are not reporting the kind of activity associated with peak building seasons, most sources describe business as steady, with transportation costs remaining one of the primary challenges facing the industry.
A retailer in Texas described current softwood activity as average for this time of year.
“It’s not gangbusters, but it’s not slow either,” the source said. “It’s just steady.”
The company handles Western SPF, Douglas Fir and Southern Yellow Pine products. According to the supplier, SPF is currently moving slightly better than the other species, although demand remains relatively balanced across all product lines.
The company primarily stocks No. 2 & Better and high-grade SPF products, along with 2 and Better Douglas Fir and No. 1 Southern Yellow Pine.
When asked about customer activity, the source said responses vary depending on the market and customer base.
“Some are slammed and some say they’re slow, but I think the overall market is just plugging along,” the source said.
The contact added that permit activity in this area remains near historical averages, helping support a stable market environment.
“We’re not really seeing the boom-or-bust markets,” the source noted. “It’s more of a steady market.”
An Oklahoma supplier handling Western SPF in 2×4 and 2×6, along with 2×4, 2×6 Douglas Fir studs and framing lumber, and Southern Yellow Pine in 2×4 through 2×12, reported similar conditions, noting that customers continue purchasing lumber at a pace consistent with seasonal expectations.
Looking ahead, sources throughout the region expect market conditions to remain largely unchanged through the remainder of the summer.
The source said most customers appear to be navigating the current market cautiously while continuing to move projects forward as needed.
According to the source, broader economic concerns remain part of the conversation, particularly as businesses continue adjusting to interest rates that are significantly higher than those seen several years ago.
“There are overarching themes from global news that have people a little unsteady,” the source said. “Interest rates are perceived as being high relative to what they were five years ago.”
Even so, the source indicated that most customers have adapted to the current environment and are continuing business as usual.
In Missouri, a contact handling No. 1, 2 and Better in 2×4 through 2×12 SPF, Douglas Fir and Southern Yellow Pine products said transportation costs and truck availability continue to be major concerns for softwood suppliers.
“The biggest thing is transportation costs and the availability of trucking,” the source said.
According to the source, rising fuel costs have contributed to significant fluctuations in freight rates, making it difficult for distributors to accurately estimate delivery expenses.
In some situations, trucking costs can change dramatically between the time material is quoted and the time transportation is secured.
“You could quote something, sell it to a customer and then turn around and try to find a truck,” the source explained. “What you paid last week may have gone up substantially.”
He added that those increases can quickly impact profitability.
“In our industry, you don’t have that kind of room to absorb those increases,” the source said.
Looking ahead, sources throughout the region expect market conditions to remain largely unchanged through the remainder of the summer. For now, sources throughout the region describe a market that remains steady, supported by consistent demand and historical construction activity, while transportation costs continue to be a key concern across the supply chain.
