Southeast Business Trends – January 2023

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In the Southeast region sources said that the market is slow, at the time of this writing, and that it will continue to be challenging, especially for the smaller businesses.

In North Carolina, a sawmill representative said that his market isn’t doing well and is certainly doing worse than it was six months ago. “Well, you know the market is driven by supply and demand, it’s always up and down. This particular scenario is true with Oak specifically. The low grades have gotten so cheap, you really can’t sell it, because customers say they’ll buy it, but the price is so cheap that you can’t sell it to them without basically giving it away,” he said.

He said that when it comes to Hardwoods he primarily deals with Red and White Oak and Poplar, in all grades and thicknesses 4/4 through 8/4.

His company sells to the moulding and millwork, furniture and flooring industries and to distributors. “The flooring manufacturers are over supplied with finished goods, after having built too big of an inventory. It will take them several months to work through that and get back to where the prices and purchasing habits will be able to start stabilizing,” he said. He attributes overstocked inventories to issues with receiving a back log of imports all at once in the U.S. “The supplies got backed up, and when it got straightened out there was an influx of imports. The moulding, millwork and flooring from Asia and South America came in with cheap prices and that has made it difficult to sell over the past couple of months,” he remarked.

He said that because his company owns their own trucks, transportation has only been a problem when it comes to the cost of fuel, as they are having to absorb that cost if they want the business.

He also noted that his labor force seems to have stabilized, but he still hears that his peers are having issues with their workforce.

In Alabama, a lumber salesman said that for his company, business is slower than it was six months ago. “I think the market has slowed down for the holidays. We rarely have a busy end of the year,” he stated.

He said that they handle Oak, Hickory, Poplar and other native Southern Hardwoods. “The species that we handle depend on what orders we are getting at the time. Our customers can bring us their own lumber, which is a variety,” he remarked. He also said that his best-selling Hardwood is Hickory, but he has noticed that he is starting to sell more pine. He added that they only do 4/4 thicknesses in grades No. 1 Common Clear and some No. 2 Common.

He said that they sell to retail lumber yards, as well as individuals who build homes. “We do flooring and paneling and they put it in the homes that they are building,” he said.

Transportation hasn’t affected his company, as it’s their customers responsibility to find a way to transport the lumber after it’s been purchased. He said that he has family in the trucking industry and hears that there are still issues.

He noted that when it comes to his labor force that it is not only difficult to find someone that wants to work, but someone that is fit to work.

In Arkansas, a sawmill representative said that there is no question about it, the market is slowing down. “With the rising interest rates, people are sitting back and asking if they really need it or if they can wait. A year ago, people wanted something, so they went out and bought it,” he remarked.

He said that he thinks that inflation and increasing interest rates are having a direct impact on their products, causing things to be slower than they were six months ago.

His company deals with Red and White Oak, Cherry, Walnut, Hickory, Ash and Gum in grades No. 3A Common and Better, in thicknesses 4/4 and 5/4. He noted that White Oak seems to be their best seller, at the time of this writing. “White Oak hasn’t dropped as much because the stain market still seems to be strong. I think, based on what I’ve heard from our customers, that is what has kept the prices of White Oak a little bit more stable than Red Oak,” he said. He also mentioned that Red and White Oak, both, continue to be his best sellers and that they are the biggest part of his business.

His company sells to end users in the flooring, kitchen and bath industries and tie markets. He said that they produce ties, cants and pallets. He noted that they don’t have any dry kilns and that they are just a sawmill, selling everything green.

He said that when it comes to transportation the biggest issue that they have is the rising costs of diesel prices and the impact they have on shipping costs. He also mentioned that the cost of insurance is going up, as well as the cost of wages, all while sales prices and profits are going down.

He thinks that over the next couple of months businesses, especially small ones, are going to be challenged due to the cost of fuel, and the shortage of employees.

By Miller Wood Trade Publications

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

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