Bulletin Board Magazine 2021 Volume 3

More than a Lumber Problem

The United States is currently imposing 9% tariffs on Canadian lumber shipments into the country. Keeping the Focus on Lumber When will lower lumber prices reach builders? Home builders and remodelers will begin to get price relief once mill prices have substantially decreased for an extended period or stabilized. Prices must fall for long enough to materially lower a supplier’s average costs after a run-up. Depending on the rate and consistency of price decreases and whether prices have stabilized at a new, lower level, it may take a few weeks to a couple of months for builders to see price relief on the order initially reported in the futures markets. NAHB remains focused on increasing the supply of reasonably priced lumber. The association is also maintaining pressure on policymakers to improve supply chains for all building materials. Learn more about NAHB’s efforts to resolve the lumber crisis at nahb.org/lumber.

Supply chain challenges are affecting many of the products used in home construction. Prices paid for goods used in residential construction less energy rose 0.2% in July after climbing 3.0% in June (not seasonally adjusted), according to the latest Producer Price Index from the Bureau of Labor Statistics. Building materials prices have increased 13.0% year-to-date, in stark contrast with the same period in 2020, during which prices increased 1.1%. Prices of steel mill products, for example, climbed 10.8% in July following a 6.2% increase in June. The pace of increases in steel prices has picked up each of the past two months and prices have climbed 108.6% over the past 12 months and 87.6% in 2021 alone. Canadian Softwood Lumber NAHB continues to encourage lumber mills to ramp up production to meet strong demand. At the same time, NAHB has been urging the Biden administration to move quickly to resume trade talks with Canada in order to lower the cost, and increase the supply, of Canadian softwood lumber. NAHB has always opposed tariffs on Canadian lumber that exacerbate price volatility and raise housing costs. Mary Ng, Canada’s top trade official, expressed a strong willingness and desire to engage in negotiations with the United States on a new softwood lumber trade agreement during a recent video conference meeting with NAHB CEO Jerry Howard. The Canadian Trade Minister Ng met with her U.S. counterpart, U.S. Trade Representative Katherine Tai, in July and raised the issue of U.S. tariffs on Canadian softwood lumber and the importance of keeping interconnected supply chains open.

Bulletin Board | 48 | www.shorebuilders.org