Softwood suppliers in the Northeast accounted for softer market conditions. In New Hampshire a contact said, “It’s definitely slower than the last quarter. All of a sudden everything has become really quiet. It’s about 20 percent slower than it was this time last month.”
Handling 4/4 and 5/4 Eastern White Pine he said 4/4 lumber is moving slower than 5/4. “Our customers are working off of very low inventories. With the uncertainty in the market nobody wants to make a lot of purchases right now.
Interest rates are high and that’s putting a damper on building. The remodeling activity has even slowed up. People borrow money for remodeling projects and the interest rates are too high right now.”
As for other factors he said, “There are plenty of trucks available but the freight rates are pretty high right now.” Looking into the next few months he said, “Some people I talk to believe that business will pick up. There is a huge demand for new housing but I don’t see much happening. The interest rates are putting a wash on that demand in my opinion.”
A source in Maine had similar conclusions. “Demand isn’t the issue right now,” he explained. “Interest rates are through the roof and the banking requirements are tight.”
As for his customers’ markets the contact said, “They’re moving slower than they were earlier this year. Some of that is seasonal of course. The building industry takes a hit traditionally during the later part of the year. Specifically in this region it gets colder earlier and people put plans out until the first quarter of the new year.”
An Eastern White Pine supplier in Maine said high lumber prices continue to be a factor and other parts of the forest products industry are softening. “The low grade and industrials are soft on our end but all of our uppers and anything value-added is moving and prices are firm,” he said. The source said his customers report increases in demand for Eastern White Pine. “SPF and Hemlock are down but Eastern White Pine is holding steady and in some cases hitting record levels at the mill,” he offered. When asked about his customers business the source commented, “Order files remain strong for our customers. Mill production is down slightly due to labor issues.”
A Connecticut lumberman said that his market has started to wane. “While my sales are doing okay, they aren’t as strong as they were this time last year,” he continued, adding that the pace at which his sales are, at the time of this writing seem to be more of a normal pace of business than the industry as a whole has seen over the past few years.
His company offers Eastern White Pine, Douglas Fir, Western Hemlock, Ponderosa Pine and Sugar Pine. “Eastern White Pine Selects, when we can get them, move the strongest for us,” he stated.
He noted that the availability of certain grades of lumber has been the biggest factor that has affected the industry, causing the sales to be flat.