Southeast Business Trends – August/September 2022

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In the Southeast, some lumber companies have hit a brick wall, as it were, in the marketplace while others are still rocking along.

In Mississippi, a lumberman said the market for his company is “not so good right now. For us, our good sales kind of came to a screeching halt the last couple of weeks. Furniture manufacturers that we deal with have slowed down. Flooring manufacturers also are slowing down.” From his perspective, “The hardwood industry is slowing down pretty fast.”

He handles Oak, Poplar, Gum, Hickory and Ash in all grades including No. 1, 2 and 3 Common primarily in 4/4 with some 5 and 6/4.

He sells his lumber to manufacturers of furniture, flooring and industrial products including pallets and crating.

“I think demand from our customers for hardwood flooring has probably been drastically reduced. The furniture businesses are having problems shipping their products. Their warehouses are full and their factories are full. They’re just not selling. I think the market is down; that’s the problem.”

As for transportation, “The rates have gone up; they’ve been up for a year. In the past month or so, they’ve been raised more. That hasn’t really affected us. We haven’t had trouble finding trucks, but we have to pay more. We just pass it on to the consumer. We buy the product, figure what it will cost to get it to our customer and then we price the product.”

A hardwood flooring manufacturer in Arkansas noted, “The economy is very challenging. We have seen a tremendous slowdown starting recently. I think there’s more anxiety than actual overproduction. We’re having to cut back hours in the flooring operation starting this week. There’s just not as many people buying, spending and willing to take risks on inventory. It’s been a great run. We’re due a downturn, and it’s here. We’ll see what happens.”

Compared to six months ago, his market is worse, he stated.

He handles Red and White Oak, Maple, Hickory and Walnut in No. 1, 2 and 3 Common, all in 4/4 thickness. His flooring is sold to wholesale distributors nationally. “I think they are selling less flooring, less than six months ago or three months ago even. They’re moving less flooring and are willing to take on less inventory. Prices have fallen dramatically.

“Transportation is expensive but is available,” he observed.

“A change that has happened is that the availability of employees has improved. People need jobs and are willing to go to work. The last two years, people have said, ‘I can’t find employees.’ That has now changed.”

In Virginia, a lumber-woman remarked that her market is good. “We’re getting some price resistance, but it’s still moving. Our customers are saying they can’t get the price they used to for their products that are made with our lumber. We work with them, reducing our prices.”

Asked if the market is better or worse than a few months ago, she replied, “It’s not bad. Prices overall are higher than they’ve ever been, so I don’t get too upset if they drop some. The market is still good.”

She handles Red and White Oak and Poplar. White Oak is selling best right now. She sells 4/4 kiln-dried and 8/4 green.

“We sell to wholesale yards, the export market and to end users,” she stated. “They’re communicating like they always do. They’re saying it’s so bad overseas that they need price reductions. They do that all the time though. That’s their game.

“Of course, transportation is negatively affecting our business,” she stated. “The prices are so high and you can’t get trucks either.”

By Miller Wood Trade Publications

The premier online information source for the forest products industry since 1927.

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