THE TOP NOTES FROM THE LEADERBOARD

Dealers re ect on 2022 and improvements made to meet challenges in 2023.

By Andy Carlo

Lumber prices sat in the penthouse at the start of 2022 before taking a gradual, slow ride down to the ground floor at year’s end.

And in 2023, lumber and commodity prices have been a source of frustration for some of the industry’s biggest players. During their first quarter 2023 conference calls, the CEOs of The Home Depot, Lowe’s, and Builders FirstSource all reported lower sales numbers and pointed to commodity prices as, perhaps, the biggest setback in revenue for the period.

But while lumber and wood product prices are down as much as 16% with softwood lumber prices lagging more than 40% from a year ago, housing suddenly has legs after a slow start in 2023. A lack of existing inventory has pushed buyers back toward new single-family home purchases despite high price tags, inflation, and lofty mortgage rates.

Housing starts in May increased 12.2% to a seasonally adjusted annual rate of 763,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported. The latest figure is also 20% above the May 2022 estimate of 636,000.

Bob Dietz, chief economist of the National Association of Home Builders (NAHB) said the most recent forecast calls for 860,000 single-family starts and 500,000 multifamily starts in 2023. But the NAHB is also projecting new home sales will hit 670,000 this year.

In Syracuse, N.Y., Erie Materials saw 2022 sales rise 11% to more than $298 million.

“In 2022 we were able to win orders by just having the product in stock,” Chris Neumann, president of Erie Materials told HBSDealer. “We have always kept robust inventories on all products and this strategy was never more successful than in 2022.”

This year the company is celebrating its 50th

Sales in $millions

Naics 4441

Building material and supplies dealers

anniversary and has expanded to nine locations with 350 associates since its founding in 1973. Location number 10 is scheduled to open in upstate Poughkeepsie, N.Y. in 2024. But a celebration may also come with much more work on the front lines.

“As supply lines have begun to stabilize, we are back to competing more on price,” Neumann told HBSDealer. “Inventory positions, while still important, are not giving us the same advantage. We are back to ‘Sales 101,’ making more purposeful sales calls, showing the value that Erie Materials brings to our customers as well as strengthening our relationships with customers and vendors.”

In the next state over, 84 Lumber based in Eighty Four, Pennsylvania, has continued to put up big sales gains over the past several years. In 2022, sales increased 11% to nearly $8.8 billion. It was less than 3 years ago, when 84 Lumber hit a milestone of $4 billion in sales for the first time.

“We’ve always operated with the belief that we can only control what we can control,” says Maggie Hardy, CEO and owner of 84 Lumber. “When look-

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Naics 44413

Hardware stores

Source: U.S. Census Bureau

The massive sales surge of 2020 has been followed consecutive year of gains for hardware and building supply dealers. For hardware stores, those gains are continuing in 2023—up 6.3 percent through the first four months of the year.

However, NAICS 4441 sales, weighed by commodity deflation are down 3.6 percent in the first third of the 2023 compared to the same four months of 2022.