Northeast Business Trends
Sources Expecting More Of The Same Throughout Rest Of 2026
By Michelle Keller
Contributing Writer
Northeastern softwood lumber sources are reporting a quiet market. There are many contributing factors, such as high interest rates, a slowdown in homebuilding and inflation. Transportation and high fuel process continue to be a challenge. This has led to an increase in freight charges.
A Connecticut lumber distributor said there hasn’t been much change in his softwood market.
“I’d say from six months ago it’s about the same,” he said.
His operation offers premium grades of softwood lumber, including mostly clear grades of C and Better Eastern White Pine, Nos. 1 and 2 and Better Douglas Fir, and Cedar in grades of C and Better, primarily 4/4 and 5/4, as well as architectural knotty.
He said demand is stable for Pine and Doug Fir, while Cedar has dropped off some due to tariffs.
“Pine is always moving in our market here in the Northeast, and Doug Fir is always going to be in demand for structural projects,” he said. “Seasonally, Cedar is down, but your clear Cedar is what people are looking for. It’s very expensive, but the people building the multi-million-dollar homes are still looking for their CVG Cedar. But I would say the biggest demand would be the Eastern White Pine and Doug Fir for us.”
His customers are primarily independent lumber yards, cabinet makers and stair builders, who offered mixed reviews about the market.
“Some customers say they are still doing good. Some people say they are doing pretty bad. We’re kind of right in the middle of both of those sentiments,” the source said. “I think everyone is down, but some people are doing better than others.”
Transportation has been a challenge.
“Freight is through the roof with diesel costs, especially for Doug Fir and Western Red Cedar coming from the West Coast,” he said. “Even local freight is up, and that’s driven by diesel prices.”
Softwood lumber sources in the Northeast report quiet market.
Another challenge has been labor. He added, “Labor is always tough, especially in the lumber industry. It’s just not something a lot of people want to do.”
The lumber representative said he thinks the market will continue to be more of the same for a while.
“I think midway through 2027 we should start seeing things rise a bit, at least that’s the feedback I’m getting,” he said “The first two quarters through 2027 should be pretty much how things are right now for the most part.”
A New Hampshire softwood wholesaler said the market in his area is quiet.
It’s worse than it was six months ago, he said, which is largely due to high fuel prices and interest rates.
“The 10-year treasury yield is 5.2 percent, which means interest rates are 7.5 percent. They were in the low 6 percent not too long ago,” he explained at the time of this writing.
Everything costs more, he said. “So, if a family is going to decide between clothing for kids for back to school or putting an addition on their home, I think they are going to go with the clothes,” he added.
He handles all grades in a variety of thicknesses of Spruce, Eastern White Pine, Southern Yellow Pine, Western and imported lumber products, plywood and OSB.
He said all lumber products were moving until mid-September. The issues in the Middle East contributed to the slow down.
“It’s just been a different climate,” he noted.
“When fuel prices and inflation go up and the Federal Reserve raises interest rates, that slows people down,” he continued.
He said there’s a growing inventory of unsold homes in New England.
“For years, if you put a house on the market, it would be a bidding war. Well, that’s not happening right now,” he said.
Existing home sales “aren’t brisk,” he said. “I think what’s happening is people who own homes either own them outright or they have a very low mortgage rate, and if they can’t get a lot for it, they’re not going to sell it. It’s not a great environment right this second. So hopefully we can figure out politically what is going on and straighten out the Middle East and go back to normal again. There’s a lot of pent-up demand.”
He sells to contractor lumber yards, crate and pallet manufacturers and multifamily builders.
He said transportation is by far his business’ biggest challenge.
While high fuel prices are a factor, truck driver availability has become a problem after a national immigration crackdown.
He said his outlook on the future of the market depends on if fuel prices and interest rates come down.
“There’s a lot going on fiscally that we have to pay attention to, but yes, if we could at least temper inflation down with lower gas prices because of the war that would certainly help,” he said.
A New York sawmill source said the second- and third-home market is still strong in his area, while the retail market is substantially down.
The slowdown occurred recently. He said at the time of this writing it’s been “much worse than it was six weeks ago.”
The source noted that people are shocked by the high cost of gas, food and other expenses. “Heating oil is a big topic here in recent weeks, because people are starting to fill their tanks,” he explained. “It’s a big shock. Prices are up, and people are hesitant to spend money.”
His operation handles Eastern White Pine in a variety of grades from industrial to selects. The primary thickness offered is 4/4.
He said Selects have taken a downturn.
“They’ve been strong for some years now, and selects have come almost to a stop,” he said. “We’re doing OK on standard and premium.”
He said the main contributors to this are a lack of new construction and rising interest rates.
His customers include manufacturers, wholesalers, wholesale distribution and some retail yards in which the business has had long-term relationships.
He said there’s some uncertainty in the market among his customers.
“We’re nervous as a group,” he added.
The source continued, “There are so many factors. It’s not just one factor, but consumer confidence is really down, and consumers are holding onto their money.”
Overall, softwood lumber sources in the Northeast are expecting more of the same throughout the remainder of 2026. Halfway into the new year, however, some say there may be light at the end of tunnel. More optimism about the market may come sooner if fuel prices begin to decrease.
