Southeast Business Trends January 2026 – A Southeast Softened By Caution
Hardwood markets across the Southeast remain soft. Contacts in Arkansas, North Carolina and Tennessee described activity as steady in spots but generally limited, with most buyers taking a cautious approach while waiting for clearer signals from housing and downstream markets. Several suppliers said that while they are still moving lumber, the volume and consistency simply are not where they were earlier in the year. Many also pointed out that customers seem to be planning purchases more narrowly, with less willingness to carry extra inventory or speculate beyond immediate needs.
“Everybody seems to have some optimism in the air,” they said, “but I think it’ll be spring before it shows up.”
North carolina supplier
A supplier in Arkansas summed up their current environment as “moderate to slow,” noting conditions have slipped “a little worse” compared to six months ago.
This yard handles primarily Red and White Oak and Hickory in 4/4 and said customers are trimming orders and working harder on price. “They’re buying less and paying less,” the contact explained.
Increased competition from nearby operations producing more unfinished flooring has added pressure, especially when freight becomes a deciding factor. “If somebody is twenty or thirty dollars closer, that can swing it,” the supplier said.
While the pace is slow, they emphasized that hardwood markets remain cyclical. “It’s going to come back. I thought it’d be sooner, but now I’m thinking about next year.” Even so, they said day-to-day activity has held reasonably steady, and they expect some improvement once new housing activity begins to gain traction again.
In North Carolina, a supplier described the current landscape as a mix of shifting export schedules, domestic adjustments, and reduced production capacity. Shipments for their operation are down about 20 percent year over year, though activity has improved slightly in recent weeks. “Everybody seems to have some optimism in the air,” they said, “but I think it’ll be spring before it shows up.”
They noted that the combination of international slowdowns and cautious domestic buying has created a market that feels unpredictable from one week to the next, even though underlying demand remains present in several sectors.
This yard handles Red and White Oak, and Poplar from 4/4 through 8/4, with better movement in 6/4 and 8/4 White Oak.
“Bookings start backing up this time of year,” the source noted. More broadly, they pointed to attrition within the supply chain. “There’s been so many concentration yards and sawmills going out of business. It won’t take much demand to tighten things up fast.”
They said that the reduced number of producers has created a situation where even a modest increase in orders could shift availability quickly, making 2026 a potentially significant period for market realignment.
A Tennessee supplier described conditions there as “poor,” with little change from last quarter.
They handle all domestic species, primarily in 4/4, and said Red Oak has shown the most stability while Poplar remains the slowest mover. Customer behavior reflects ongoing caution. “Most of them are pulling back until the first of the year,” the source said. The slow housing market remains the primary factor affecting demand.
This operation does not face trucking shortages, as they run their own equipment, and is not currently active in export.
Looking ahead, they remain hopeful. “We’re optimistic things will pick up and we’re hoping 2026 will be a great year.” They added that any improvement in housing or consumer confidence would be enough to help shipments recover fairly quickly.
Across the region, the themes are consistent: lighter purchasing patterns, softer housing-related demand, seasonal export pauses and leaner production following several years of mill and yard attrition. Even so, suppliers in all three states noted that a stronger cycle could develop quickly once orders begin to build again. For now, most are focused on steady day-to-day movement, managing production and watching for early signals of improvement as the new year approaches.
