Southeast Business Trends
Will Hopes Or Fears For 2026 Be Fulfilled?
Lumber sources share concerns about the younger generation’s lack of interest in the lumber industry and state their lack of knowledge can’t supplant the generation aging out of the workforce.
Overall, they said the market is down but somewhat stable for the majority.
A lumber source in Kentucky shared his thoughts about the market, which is “down but somewhat stable. Our stave business is completely gone. The barrel stave business was way over supplied and is still extremely quiet. Our biggest customer was Brown-Forman and when they stopped, that put an end to our staves for the moment. We’ve struggled to continue to exist since losing the stave business. It was 60 percent of our sales. We polish our equipment everyday so we’re ready to go back to work when the time comes.
“The lumber business is trying to find its place in the market globally. After the election, the tariffs didn’t help. I don’t sell offshore but to customers who do. That was tricky. We are heavily involved in the crosstie industry and that business is looking to be a bit over supplied right now. Crossties are stable for the moment, but it doesn’t look good for 2026.
“We haven’t had a good year since 2023. Not all of 2024 was bad but it was in the tank before Trump was involved. Our business hit a downturn approximately in August/September of 2024. We tried to start this new pallet operation which is struggling but attempting to get better. We’ve done a lot of cost cutting.”
He said business is the same as six months ago and they had a wet spring, which “kept logs off the market and we got enough to survive and keep the mills running. There were no extra hours or any overtime. I have shut one of my mills down and have five sawmill operations.”
He said they handle “all hardwoods from A to Z — Ash to Walnut. Red and White Oak are the biggest part of our production along with Poplar and Hickory. Except for Poplar, we can run anything as a crosstie. White Oak is better than Red Oak and Hickory is better than Poplar. Poplar had a big volume but not a good margin.” They work with all grades and many of their customers purchase No. 2 Common (which they offer in every species) & Better but very little No. 3A Common unless it is used in a pallet product. The thicknesses offered include 4/4 and 5/4 as well as 6/4 and 8/4 FAS & Better in Oak.
While they don’t export, many of their customers do. He listed Baillie Group as one of their customers, claiming the company has a “large plant 30 minutes from us.”
Lumber representatives have mixed views about 2026.
He revisited No. 2 Common, adding that the grade is a heavy percentage of their sales. “It goes into residential and truck flooring. We try to sell to as many end users as possible. We have one customer that buys Oak and Poplar who does a lot of hardwoods for homes like stair products. They are seeing a bit of an upturn for the first quarter, so that is a good sign. There is a bit of an upturn for the No. 1 Common product in 5/4. We’re a little bit skeptical about the trailer floors business – we do 5/4 for them – and the FleetOwner magazine has a lot of comments in it about truck and freight trends. They are also way overstocked and over inventoried in terms of the capacity they have for freight, which means that trailer sales could be affected.”
They have their own small fleet of trucks and contractors who work for them.
“Labor wise, we have a stable group. They are a good group of people with a lot of years of experience. We had to lay off some people back in the spring because of the stave industry and the sawmill I shut down. I lost 46 people. I don’t see that coming back for the first half of 2026. I see that our future needs automation because it can do a better job of creating product and coming to work every day.”
In Georgia, the market is “poor” due to the season and tariffs according to a lumber source.
“I’m hopeful for 2026. We’ll see what happens, but it is worse than six months ago.”
Red and White Oak and Ash and Poplar in 4/4 and No. 3 Common & Better are what they offer. White Oak is the best seller.
End users are their main customers and they don’t export.
“At the moment, transportation and labor are stable, so we have a few things going for us. We need pricing to improve because there is just zero margin by the time we can process the lumber,” he added.
In Tennessee, the “last quarter of 2025 was fairly slow,” observed a lumber representative.
The market is “definitely worse,” than six months ago.
“All major Appalachian species – Cherry, Ash, Hard Maple, Hickory, Poplar and Red and White Oak,” are what he said they handle. “Upper grade Poplar is moving the best, but Red Oak is selling the best. We handle all thicknesses in Poplar. 4/4, 5/4, 6/4 and 8/4 have all moved well. I’m low on inventory for FAS and No. 1 Common right now in Poplar but that’s just another sign of it moving well.”
While they don’t export directly, they sell products to American exporters in addition to distribution centers, trim, moulding, flooring and cabinet manufacturers as well as parts and component companies. “It seems like most people have a decent feeling about the early first quarter of 2026. Everybody the last quarter of the year seem to be singing the blues. Their orders are down which, in turn, means our orders are down. My customers are hopeful that the first part of 2026 will be better,” he noted.
He delved into the labor struggle his industry and company has been facing, saying, “The younger generation is not built for it. I’ve been here since 1994. The quality of help we have now compared to what it was is way off. They’re not taught to work. We’ve got a good benefits package here with health insurance and paid time off. I feel like our pay for our area is extremely competitive and we’re probably one of the highest paid places in the county.
Our industry as a whole and seems to scare a lot of folks off. We’d get some guys here with leader mentalities who became managers or team leaders, but now the guys are just followers. I don’t see any potential.
Cell phones are one of the worst things to happen to the workplace. Also, the instant gratification is causing problems because they expect to be hired in here and make the same as the guys who have been here 30 years. It’s different and it worries me for the future of our industry. I’m one of the youngest guys here in our core group and I’m 50. That’s pretty concerning. I’ve only got a few more years left to work and so do these other guys. It reminds me of that song ‘Who’s Gonna Fill Their Shoes’ by George Jones.”
