In the first full week back to work of 2021, the latest data of housing construction and home sales out of the US shows a marked increase over the previous year. The economic indicators for future home building, and remodelling, are rosy. Macroeconomic conditions in the US remain murky, however there are two things that can be solidly stated even at this year part of the year: one is that home builders are reporting difficulty in finding lots for purchase. The other is that there is challenges finding additional workers to hire. Indeed, the latest US data release shows the 472,500 new residential construction jobs created from May through December 2020 offset the 456,800 jobs that were lost in April and May. As well, for full-year 2020, home building and remodelling added 57,200 net jobs in the US, said Madison’s Lumber Reporter.
The traditional slowdown associated with the Holiday Season was much shorter and smaller in magnitude than in previous years, according to Western S-P-F purveyors in the US. Demand did not wane; producers boosted their asking prices by double digits or more.
Canadian Western S-P-F producers reported demand tapered off at the end of 2020, partially due to lockdowns and curfews in Quebec, so sawmills tried to focus on selling into the US market. However, persistent lack of rail car supply caused logistical headaches, pushing delivery times into mid-March. Sawmill order files were already into the first week of February.
Unstoppable demand over the Holiday Season pushed prices relentlessly higher, for the week ending January 8, 2021 benchmark softwood lumber commodity item Western S-P-F KD 2x4 #2&Btr prices rose to US$944 mfbm, which is up another +$70, or +8%, over the previous week, said Madison’s Lumber Reporter. Last week's price is +$324, or +52%, more than it was one month ago when it was $620.
Compared to the price one-year-ago, of US$402 mfbm, last week benchmark softwood lumber item Western S-P-F KD 2x4 #2&Btr was selling for US$944 mfbm which is +$542, or +135% more.
The below table is a comparison of recent highs, in Sept 2020, and current January 2021 benchmark dimension Softwood Lumber 2x4 prices, compared to historical highs of June 2018 and compared to recent lows of September 2015:
