July 2020 Component Manufacturing Advertiser

Page 102

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Don’t Forget! You Saw it in the

July 2020 #12252 Page #102

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Lumber Briefs By Matt Layman Publisher, Layman’s Lumber Guide

Current Lumber Market is a ‘Fad’!

Layman's Lumber Guide

Lumber Market FORECAST Matt Layman, Publisher "The lumber market is easy to beat when you know what is going to happen." Sunday June 23, 2020

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Current Lumber Market Is a "FAD"!

ithout exception, in every conversation I have had regarding the pandemic’s positive impact on the lumber market, not a single person thought this outcome was possible.

Without exception, in every conversation I have had regarding the pandemic's positive impact on the lumber market, a single thisMy outcome possible. On mynot part, I see person that as thought a failure. job is was to detect the unexpected. When I do On my part I see that as a failure. My job is to detect the unexpected. When I do not, that not,creates that creates the 1.4 of 10 miscues, ormarket missedforecasts. market forecasts. I consider the 1.4 out of out 10 miscues, or missed I consider the FTP call the for aFTP call for a reversal high at week 21 a miss. reversal high at week 21 a miss. Looking forward, we must include what we have learned from this experience. Primarily, consumers are going to consume whatever is available. The volume of consumption as a Looking forward, we must include what we have learned from this experience. Primarily, percentage of disposable income increases over time. The national savings rate from 1960 to consumers 2019 declined 10.6% to 7.6%.is By contrast,The during the first two months ofas the pandemic's stay-atare going to from consume whatever available. volume of consumption a percentage of disposable home quarantine, March and April, personal savings as a percentage of disposable income rose to income increases over time. The national savings rate from 1960 to 2019 declined from 10.6% to 13.1% and 33%, respectively. I believe, due to decreased spending options. 7.6%. By contrast, theonfirst of spending the pandemic’s March and Consider this,during reported Maytwo 29, months consumer declinedstay-at-home 13% in April, quarantine, the most since 1947. That was likelyas due to the expected earnings decline of 5%. But that didn't happen. April, personal savings a percentage of disposable income rose to 13.1% and 33%, respectively. I Instead, Uncle Sam padded the US payroll for a 10% increase. Consequently, financially believe this was due to decreased spending options. frightened consumers suddenly found themselves flush with cash to burn and few places to spend it. Only businesses which the government deemed "essential" were open. Building suppliers made that cut. this, reported on May 29, consumer spending declined 13% in April, the most since Consider With consumers confined to home, flight to home improvement became the "fad". The lumber 1947. That was likely due to the expected earnings decline of 5%. But that didn’t happen. Instead, industry, specifically, pressure treated lumber, has been the primary beneficiary. UncleThis Samcounter paddedcyclical the USlumber payroll forisa a10% increase. Consequently, financially rally circumstantial fad, soon coming to an end,frightened like mulletsconsumers and bell bottom suddenly foundjeans. themselves flush with cash to burn and few places to spend it. Only businesses which

the government “essential” were open. Building suppliers made that cut. Looki ng F orwardeemed d ...ML

LLG 2x4#2 Composite (SYP-E, SPF-W, HF GDF) 2019-Current . FTP's Forecasted Turning Points: Vertical arrows project times of reversals or accelerations.

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PHONE: 800-289-5627

••• Are you fed up with being caught on the wrong side of the Read/Subscribe online at www.componentadvertiser.com market...losing orders because your lumber prices make you uncompetitive. I can assure you the orders you lose are not because the

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FAX: 800-524-4982


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