In the Southeast, lumber sources have provided a variety of reviews on what state the market is in.
In Kentucky, one lumber representative reported that while the upper grades are moving well, “the 2 and 3 Common Oak is definitely very tough. Residential flooring is non-existent.” As for the reason behind this slow down, he remarked, “I don’t think I really have a good answer for the reason for the slow down. It’s definitely not production because that is way down. I think the vinyl plank flooring has probably hurt the flooring market.” In comparison to six months ago, he said, “it’s slightly better because of a slight uptick in pricing and demand focused on the upper grades. The lower grades have slipped down but I’d say, overall, the upper grades have climbed higher than what the lower grades have dropped.”
He mentioned that they handle “pretty much all Appalachian hardwood species” in FAS No. 1 and No. 3 Common in addition to making railroad ties and pallet cants. White Oak is selling the best but there is a “lot of interest lately in Poplar. Poplar is really picking up. Red Oak is also not doing poorly at all,” he added.
They sell to concentration yards, pallet and cabinet component companies in addition to some residential truck and trailer flooring businesses. The truck and trailer flooring companies, according to the source, have “really slowed down.”
He mentioned that the only thing negatively affecting the business right now would be interest rates due to not enough homes being built and if the homes are being built, “they’re building them cheaper than in the past and have not been using hardwoods.”
On a scale from one to 10, a lumber spokesperson in Tennessee gave the market a four as a result of a lack in demand. It is the same as it was six months ago.
They work with all the hardwood grades primarily in Red and White Oak, Ash, Poplar, Walnut and Hickory. Red Oak and Poplar are the current best sellers.
They sell their products to distribution yards, door and cabinet manufacturers and moulding and millwork companies.
As for his stance on proposed tariffs, he responded, “if that makes America stronger, so be it.” He also added that since the pandemic, “labor has been a challenge and people have had to adjust a little bit to the interest rates.”
In North Carolina, a lumber source reported that the market has been “quiet. We’re still trying to recover from the storm. The flooring manufacturers that tend to buy a lot of the low grade, green lumber, are very slow in this area. We’re in a funk.” When asked about how the market compared to six months prior, he replied “that’s a double-edged sword. In some ways, volume wise, I think we were a little bit better but pricing and other things were cheaper.”
The three primary hardwood species that they sell include Red and White Oak and Poplar in all grades and thicknesses. Regarding their best seller, “price wise and strength wise overall,” he named Red Oak.
He said they sell to “anywhere from flooring to furniture, millwork companies and domestic and international businesses.” As for issues affecting his business, he detailed, “the flooring guys are very slow and concerned because of all these speculative home building companies like the Toll Brothers and others that typically build medium to $250,000 houses that are just not using wood. Housing has slowed down and on top of that, they’re putting in luxury, vinyl flooring that looks like wood. Everything is particle board and plastic like IKEA products. There’s a general lack of using solid wood and I hope that trend changes. In the 1980s and 1990s, a piece of furniture, whether it was an entertainment center, an end table, a dining room table or some accent pieces, those were heirlooms everybody bought and passed down through the generations. I’ve got a dining room table and a hutch that were my great grandfather’s.”
As for his thoughts on the possible tariffs, he said “back during the first round of tariffs and really, even prior to that, we lessened our dependency on China probably by 70 percent. So, I think a lot of that business, when the tariffs did kick in, moved to Vietnam, Indonesia, India and other countries but we’re seeing that China is still a very big user. There were companies and some of them, not too far from here, that were pretty much dependent on China and obviously, they faltered or changed course.” He listed inflation as an issue they’re grappling with and labor. “When it comes to labor, the cost doesn’t go away. The cost of fuel is up high just because there is more competition or less demand, which drives the price down. That still does not change the core cost. Labor’s a big issue and I’m sure that everybody would like to make $100,000 a year but we’d be paying $42 for a McDonald’s Big Mac. Companies are going to make what they’re going to make and everything else gets passed along.”
