Northeast Business Trends

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Northeast Business Trends 1
Cadance Hanson
Staff Writer

By Cadance Hanson
Staff Writer

While two out of three lumber sources in the Northeastern states agreed that business was “soft” in the first quarter of 2024 thanks to wintry weather, all three lumbermen were optimistic when looking toward the future.

As of press time, a Massachusetts source, who sells Douglas Fir, Eastern White and Idaho White Pine and Hem-Fir, among other Softwood species, compared the “sideways” lumber market to car sales.

“If you had a car that you wanted to sell,” he analogized, “is it going to sell on a real snowy day? Or is putting it out there on the front lawn when it is nice and shiny out probably better? Right now, we are not on shiny days yet. We must get through winter.”

He added that the market could improve before the season.

“People might anticipate something,” he said. “And they don’t want to miss getting a good deal. I’ve got a feeling, the way things have been the last few years with production being sort of limited, people are going to try to come through the door all at once and the market is going to move. It’s called ‘eat what you kill.’ What do you do when the market is flat? It is very hard to trade. They start shorting the market. That creates the rush through the door.”

The distributor primarily handles pressure European and Spruce-Pine-Fir, treated wood and said now that interest rates have stopped going up the market is due for a boost.

“Interest rates are trickling down now,” he said. “That plays into the overall market conditions. People who didn’t qualify for first time home buyers may be qualified now on the second go-around.”

Regarding claims that inventory is heavy, the source said that he was skeptical.

“It is like a gas tank,” he noted, “You don’t need a full tank to drive around on right now. In terms of inventory, you don’t want to have a quarter of a tank. So, we really have half a tank and if you need to fuel up a little bit then put some more fuel in.

“I don’t see anyone moving around on full tanks in inventory and having a lot,” he added. “They used to do ‘just in time’ buying. Everyone was fishing behind the net. ‘We need this now.’ These days, you never know what you can get.”

A New Hampshire source agreed that January’s weather conditions “slowed things down” throughout the country.

“Business is still fairly steady,” he added, “although not spectacular.”

He noted that the “prognosis for spring is pretty good.”

“There is hope on the horizon,” he said. “If the winter weather hadn’t been as bad, I think there would have been some more orders for the mills.”

The distributor, who works primarily with Western and Eastern Spruce, European imports, Southern Yellow Pine and Douglas Fir, said he runs the full “gamut of commodity framing lumber and structural panels.”

He further noted that the decline of Western Spruce Pine Fir (WSPF), which is logged in Canada, has put Southern Yellow Pine (SYP) “under pressure.”

He offers SYP “stress grade dimensional lumber, boards and timbers.”

“We’ve already heard some shutdown announcements from some majors,” he said regarding the decade long decrease in WSPF. “That has led to an increase in Southern Yellow Pine production. It is the cheapest fiber on the planet from a raw material standpoint.”

The WSPF decline can be traced to an infestation of bark beetles, wildfires and policy factors.

On the other hand, the demand for SYP, which is grown from TX to NC, has taken off since 2009.

A Connecticut lumber distributor and manufacturer said that weather has not influenced business yet this year.

“We are at the end of the business where weather isn’t really going to affect us unless we get a deep snow,” he said.

“Most of the materials that come to us are rough sawn and S4S,” he said. “So, we are always processing.”

He said that oftentimes wet ground conditions pose a bigger threat than the snow itself.

“Machinery tends to sink,” he said. “No one goes in the forest in the spring unless the ground is frozen solid.”

The source said that he services the retail sector in Connecticut, Rhode Island, New York and New Jersey.
Noting that 2023 was an “off year,” he noticed that January of 2024 was “very busy.”

“I think 2023 was the year after COVID,” he said. “There was a little bit of recovery there. A lot of people had overpriced product that they had bought during COVID. Everyone has whittled through the majority of that now.”

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