Northeast Business Trends
A Hesitant Holiday Season
By Cadance Johnson
Associate Editor
Despite mixed reviews on the market, lumber sources agree that they are struggling with labor, and transportation is easy to find.
A lumber source from New York stated the “second and third home markets are still very strong but it’s a small percentage of our market. The blue-collar market is not good. A lot of items are overpriced on the market. People are still trying to cash in on covid not realizing those markets aren’t there anymore. So, there is a lot of real estate on the market but as far as real-estate movement, there is very little. I’m looking at the reality, which is how many building permits are being issued for this area.
“I think the word of the year is ‘hesitation.’ People are afraid to spend that money because of our political and inflationary times but the stock market is still strong.”
He delved into the difficulties caused by high prices, commenting, “There are retail yards with pricing that is way out there and they are losing business because of it. The cost of logs has been more over the years, so have the cost of parts that keep the machines running. Wages are the highest they’ve ever been but it’s the only way to keep people. Insurance is insane and so are taxes. All those increased costs of goods mean a higher average cost for the final product.”
“I sell burl tabletops and at a show, I asked people who were from all over North America, ‘What’s going on in your area?’ They’d say, ‘My kid is living at home because they can’t afford an apartment, or they can’t find one.’ I’d ask them how old their kid is, and they’d say, ‘36.’ I get it. We have a housing crisis going on.”
He had a bone to pick with vacation/rental homes, stating they were a “wicked, wild pitch in this area because nobody would believe the people that came over here during the pandemic and bought houses just to have for Airbnbs. The Airbnbs are dying in this area because there are so many of them that they all can’t survive. It depends on the tourist traffic in that area, and the Canadian traffic has really slowed down with the situation this year.”
The market is worse than six months ago. “I see a bad moon rising and I keep telling people to get ready. It can’t sustain with the lack of business and if they keep over producing. I think it is catching up to them now because there is a lot of wasted lumber that sits there or gets dumped. I know this is happening because I am competing against it and it does affect everybody. I hope I’m not coming across as negative but I’m a realist.”
Eastern White Pine is the only species they offer and they “primarily cut it in 4/4. We do a small percentage of timbers for the framing, posts and beams industries,” he said.
“Our customers are mostly wholesalers and some retail yards who have been with us a while. We do very little exporting but send some product to Canada. We recently sent five loads to Pakistan. It was basically to get rid of material and the pricing wasn’t good,” he added.
The Northeast has reported mixed reviews ranging from not-so merry to stable.
He commented on how the older generations are higher in population than the younger, which means there’s “not enough population to replace the aging group. There aren’t enough immigrant workers who can save some businesses to go around. Two years ago, I would have put immigrant workers in, but we don’t have enough housing here for anybody.”
As for trucking, he said it is “available at the drop of a heartbeat because there is less material to move around and less freight going out. Truckers are taking a lot less money, too.”
He referred to the tariffs as a “circle,” that makes him feel like he has “been on a roller-coaster ride, and I am out of Dramamine and am punch-drunk because of it.”
In New Hampshire, a lumber source noted the market is “doing well. There is demand for all the softwood we sell. There is a seasonal shift – spring and fall are busier than other seasons.”
The market is the same as six months ago.
They offer Eastern White Pine, Southern Yellow Pine, Douglas Fir, Western Red Cedar, Atlantic White Cedar, Northern White Cedar and some Alaskan Yellow Cedar in knotty and clear grades such as Premium and Select.
They also sell those species in thicknesses “anywhere from 3/4 of an inch up to 4-inches.” Eastern White Pine is their best seller.
Despite not exporting, they have a variety of customers including homeowners, builders and contractors. “It’s stable for my customers and I haven’t heard too many concerns about the market in general. There are some complaints about the higher end Cedar because it has gone up quite a bit in price.”
He listed labor as a challenge for his company.
Maine’s retail lumber industry, according to a source from that area, is “steady but starting to slow down the closer we get to the holiday season. The market is still steadier than we expected it to be because of the Canadian tariffs and other issues that hurt the softwood market early in the year.”
It is better than six months ago.
They handle Eastern White Pine in 4/4, 5/4 and some 8/4 in addition to Standard, Premium, Finish, C Select and D & Better Select. “Our Premium grade and Select are moving better,” he said.
He mentioned they sell to “almost all the retail yards in the state of Maine. We have a few wholesale accounts in New York, Pennsylvania and Tennessee that we distribute to. We have a distribution company in Canada – Dartmouth, NS. They’re an extension of us. We do export to Pakistan, which seems like a popular area for lumber to go. It is the pricing and the quality of the product. They buy it for small, wooden items like picture frames.”
While labor is a challenge, the transportation industry is “more in need of us than we are of them,” he added.
