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Don’t Forget! You Saw it in the
April 2018 #10225 Page #83
LAYMAN'S LUMBER MARKET BRIEF COMPONENT MANUFACTURER'S EDITION
Lumber Briefs By Matt Layman Matt Layman, Publisher AprilGuide 2018 Publisher, Layman’s Lumber
More Lumber Price Volatility Ahead
More Lumber Price Volatility Ahead
There are three fundamental lumber market components that will likely combine to make 2018 the most volatile year for prices on record.
2. INTEREST RATES: The new Fed Chairman Powell is dangling four rate increases. 0.25% hikes in 12 months 1) LABOR: ICE gave notice last week that it intends to crack down on undocumented workers inFour the construction would putyoung mortgage rates up 25%. That alone will knock industry...on the jobsites. We already have a shortage of skilled laborers and American children are not growing up out with aspirations of wearing a tool belt for a living. Putting the pinch on undocumented workers, removing them from the thousands of prospective home buyers, assuming there are jobsite has here one devastating Jobs under construction raids, and undocumented enough framersby leftthose to build them. are three result. fundamental lumber marketwill be disrupted/halted workers willcomponents not come tothat work This2018 could happen immediately. That disruption would freeze the flow willfearing likely deportation. combine to make of lumber, creating bottle neck, andprices resulton in record. a massive over supplied condition. Plus, wouldcan create a housing panic. Rail ittraffic resolve its issues by recalling 3. LOGISTICS: the mostavolatile year for In short, a crackdown on undocumented workers on construction jobsites would crash the U.S. economy. I'm not equipment and experienced crew. Trucking, not so simple. supporting illegal immigration, however we created this economic dependency shouldisneed todependent find a lesson disruptive The lumberand industry just as owner/operators 1. solution. LABOR: ICE gave notice last week that it intends to as it is on undocumented construction workers. The issue crack down on undocumented workers in the construction with trucking is low pay for drivers. One solution for future 2) INTEREST the RATES: The new Fed Chairman is dangling a four rate increases. Four 0.25% hikes in 12 months industry...on jobsites. We already have aPowell shortage of logistics bottlenecks is mill-owned fleets...in-house trucking. would put mortgage rates up 25%. That aloneare will out thousands of prospective home buyers, assuming there are skilled laborers and young American children notknock growing Pay drivers better and give benefits. enough framers left to build them. up with aspirations of wearing a tool belt for a living. Putting To expedite turn around time, consider eliminating backhauls. the pinch on undocumented workers, removing them from 3) LOGISTICS: Rail traffic can resolve its issues by recalling equipment and experienced crew. Trucking, not so simple. Yes, that is correct...let the rigs dead head home. They get back the jobsite has one devastating result. Jobs under construction The lumber industry is just as dependent on owner/operators as it is on undocumented construction workers. The issue willtrucking be disrupted/halted those raids, and undocumented same day or inisone day andfleets...in-house are ready to gotrucking. again. Lumber with is low pay forbydrivers. One solution for future logistics bottlenecks mill-owned workers will not come to work fearing deportation. This could prices confirm that freight costs are not a deal breaker. Pick a Pay drivers better and give benefits. happen immediately. That disruption would freeze the flow truck freight anywhere and double it. The increase will likely ofTo lumber, creating a bottle time, neck,consider and resulteliminating in a massive over byYes, something between $10–$25. market volatility expedite turn around backhauls. that is correct...let the rigs Lumber dead head home. They will supplied condition. Plus, it would create a housing panic. In Lumber coverprices that 7confirm to 10 times a year. will absorb the get back same day or in one day and are ready to go again. that over freight costsThe are market not a deal short, a crackdown undocumented on construction breaker Pick a truckon freight anywhereworkers and double it. The increase will likely by something between $10-$25. Lumber freight increase in exchange for service. jobsites would will crash the U.S. I’mover not supporting market volatility cover that 7economy. to 10 times a year. The market will absorb the freight increase in exchange for Or, better yet...just raise rates to attract more owner operators. illegal immigration, however, we created this economic service. If you cannot get your lumber delivered on time due to equipment dependency and should need to find a less disruptive solution. availability, start aget fileyour of the carriers that deliver to you. Or, better yet...just raise rates to attract more owner operators. If you cannot lumber delivered on time dueCall the dispatcher and offer to pay the driver an extra $0.50 per mile. 200 to equipment availability, start a file of the carriers that deliver to you. Call the dispatcher and offer to pay the driver an extra $0.50 per mile. 200 miles = $100 / 22mbft = $4.50/mbt. miles = $100 / 22mbft = $4.50/mbt.
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Recent copies of Layman's Lumber Guide / FORECAST/ BRIEFING / BLUEPRINT at www.laymansguide.org Looking Forward ...ml
Composite (2x4's #2 SYP-E, SPF-W, Dry Hem Fir, Green Doug Fir.) 2017-18 vs (FTP) Forecasted Time & Price 2017-2018 Vertical arrows project time-major turning weeks. Red squares project price based upon forecasted direction and average price change of $6 per week. Green Zone=Increasing Demand #07-36 Red Zone = Decreasing Demand Weeks #37-06 Yellow Zone=Daylight Savings Weeks #11 Through Week #44.
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A veteran lumberman, Matt Layman publishes Layman's Lumber Guide, the weekly forecasts and buying advisories that help component Layman's Lumber Guide...Matt Layman, Publisher PO Box 905, Belmont, NC 28012 manufacturers save money lumber purchases everyEmail: day. matt@laymansguide.org You can reach Matt at 336-516-6684 orwithout matt@laymansguide.org. Phone or Text:on 336-516-6684 Fax: 888-811-6917 Reprint or distribution is unlawful permission. PHONE: 800-289-5627
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