Contractor Advantage January / February 2022

ROUGH CONSTRUCTION ISSUE KEEPING THE PEACE

Publications Mail Agreement #40006677

THE RELATIVE CALM AFTER THE STORM

January/February 2022

Castle Building Centres Group Ltd. is a Canadian member-owned, Lumber, Building Materials and Hardware buying group representing over 300 member locations across Canada.

Contractor Advantage Magazine is the exclusive publication of Castle Building Centres Group Ltd. featuring quality Castle vendor brands available at Castle Building Centres locations.

Visit castle.ca to find a Castle location in your area.

Editorial Director Castle Castle Building Centres Group Ltd. Jennifer Mercieca Art Direction and Design Espress Labs Inc. Contributors Lawrence Cummer Lisa Gordon

Advertising Inquiries and Marketing Contact Jennifer Mercieca Director of Communications Castle Building Centres Group Ltd. 905-564-3307 jmercieca@castle.ca

JANUARY / FEBRUARY 2022 Volume 27 Issue 1

Published and designed exclusively for Castle Building Centres Group Ltd.

by Espress Labs Inc. On the cover: Taiga Building Products

ABOUT CONTRACTOR ADVANTAGE

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CONTRIBUTORS

LAWRENCE CUMMER Lawrence (“Law”) Cummer is a freelance writer and editor and has been a frequent contributor to Contractor Advantage, Ideas and Rough Construction for nearly a decade. Over his more than 20-year career, Law has written about contracting and construction, general business, information technology, health and safety, personal finance and almost every topic in between. He has a passion for storytelling and sharing how people can work better, easier — and “smarter” — from contractors to technologists to business executives.

LISA GORDON Lisa Gordon is a freelance writer and editor based in St. George, Ont. She operates Mustang Media Writing & Editorial Services, delivering informative and engaging articles for trade and association magazines in a variety of industries. Contact her at www.mustangmediaservices.ca.

JILL JOHNSON Jill J. Johnson is the President and Founder of Johnson Consulting Services, a highly accomplished speaker, an award-winning management consultant, and author of the bestselling book Compounding Your Confidence. Jill helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. Her consulting work has impacted more than $4 billion worth of decisions. She has a proven track record of dealing with complex business issues and getting results. For more information on Jill J. Johnson, please visit www.jcs-usa.com.

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CONTENTS

TABLE OF OF TABLE

06 26 34

KEEPING THE PEACE Even though housing density is increasing in Canada’s urban centres, homeowners are still looking for ways to preserve quiet on the home front.

EXCEPTIONAL LEADERS HAVE CLARITY How to sort your thoughts.

THE RELATIVE CALM AFTER THE STORM Lumber prices and volatility may still be high but aren’t expected to reach 2021 heights.

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KEEPING THE PEACE

Even though housing density is increasing in Canada’s urban centres, homeowners are still looking for ways to preserve quiet on the home front.

Written by Lisa Gordon

Photo courtesy of Johns Manville Canada 6

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According to the 1861 census, 84 per cent of Canadians lived in a rural area. By 2011, the tables had almost completely turned, with about 81 per cent of Canadians living in urban centres.

With more and more people preferring to live and work in cities, Canada’s small towns are shrinking. As people migrate to urban areas and populations swell, there are a number of inherent challenges. One of the biggest is housing.

As the demand for urban housing skyrockets, developers are responding with vertical construction options, including condos, as well as smaller building lots for single-family homes.

What does this mean? Quite simply, we’re all living closer together in Canadian cities – it’s just a fact of modern life. But, it’s also a fact that just because we have to live closer to our neighbour, we really don’t want to hear them!

That message has been received loud and clear by gypsum and insulation manufacturers, and they’re responding with a variety of sound attenuation products designed to help homeowners and their neighbours keep the peace.

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FEATURE STORY // KEEPING THE PEACE Photo courtesy of Building Products of Canada Corp.

“In the last year and a half, with everyone working from home, there has been a huge demand for sound attenuation products for smaller projects,” said Matthieu Danis, product manager, Wood Fibre at Building Products of Canada Corp. (BP Canada). “But in the bigger scheme, we are seeing much higher demand for sound attenuation because of the density of housing developments.

It will absolutely increase moving into the future.”

“The products we manufacture address airborne noise,” explained Danis. “This is transmission from one room to the next, from above or next door. Our SoundSmart acoustic panels have been professionally designed and tested in walls or ceilings. They can be used in a multi-family dwelling in the partition walls between units, or in a single-family home. They can also be used to isolate a room, such as a home theatre or office.”

That demand is extending well past Canada’s traditional urban centres – Vancouver, Toronto and Montreal. Danis pointed to cities in Alberta and the Maritimes, where population density is ratcheting up. “Higher density requires more privacy,” he said.

SoundSmart panels are 5/8” thick and made from post-consumer and post-industrial recycled wood fibres. A laminated foil facer on the panel allows it to double as a vapour barrier, as long as the perimeter and joints are sealed. Additionally, Danis said SoundSmart panels are a greener choice since they are constructed without synthetic binders and do not emit VOCs.

BP Canada’s Quebec City plant manufactures wood fibre products, including insulating panels and acoustic suspended ceiling tiles.

“It’s a lot cleaner when you cut it, thanks to the laminate facer,” he explained. “It also makes it less brittle. It’s a soft panel, fairly light and easy to // JAN - FEB 2022

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Photo courtesy of Building Products of Canada Corp.

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FEATURE STORY // KEEPING THE PEACE manipulate. We’ve tried to facilitate sound control for both the average DIY-er and professionals.”

BP Canada worked with acoustic engineers to develop four SoundSmart wall installation combinations, or prescribed assemblies, that have been certified by the National Research Council of Canada (NRC). Each has been assigned an STC rating – or Sound Transmission Class – which is an indication of how well an interior/exterior wall, ceiling, floor, door or window attenuates airborne sound. The higher the STC rating, the greater the sound control. For example, the National Building Code of Canada mandates STC 50 wall assemblies between multi-family units.

The four assemblies from BP Canada provide STC ratings of 55, 57, 59 and 71, depending on the selected wood or steel studs, sound attenuation batts or regular fibreglass insulation, resilient channels, SoundSmart panels and gypsum panels.

“It’s really the fact that we have certified the performance of these four wall assembly recipes that makes them unique,” said Danis. “There are other products that provide sound proofing in a similar fashion, but they’re not proposed in a detailed wall assembly that has been performance tested and certified, ensuring that the work and dollars invested in soundproofing your home are optimized.”

Photo courtesy of Building Products of Canada Corp.

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Photo courtesy of CertainTeed

BP Canada also makes natural fibre wood panels that are 7/16” and ½” thick, without the laminate facer, that offer “fairly decent” sound attenuation.

As well, the company’s ½” Enermax panels offer both sound attenuation and insulating properties.

Neither of these last two products have official acoustic certifications, however.

Danis said BP Canada is also watching European developments, where the wood fibre panel industry is more advanced. Consequently, it is investigating the development of a thicker wood fibre exterior sheathing panel that would offer higher sound attenuation and insulating properties.

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SYSTEMS TO COMBAT SOUND Some sound attenuation materials act like a cushion to absorb airborne noise. The softer the material, the better the absorption. Harder materials may provide sound attenuation by blocking or reverberating sound waves.

CertainTeed, a division of global manufacturer Saint-Gobain, offers a variety of sound attenuation products for residential applications.

According to Brent Bélanger, the company’s senior architectural technical solutions manager, residential construction offers the biggest challenges when it comes to controlling noise.

“We’re living in more confined spaces on top of each other,” he said. “That’s why we’ve

FEATURE STORY // KEEPING THE PEACE Photo courtesy of CertainTeed

tested a number of systems as opposed to just individual products.”

want is reduced space – but they don’t want the noise, either.”

CertainTeed’s SilentFX® QuickCut noisereducing drywall is one component of those wall systems. Offered in ½” (13mm) and 5/8”( 15.9mm) thicknesses, with the latter being firerated, SilentFX is an enhanced gypsum board with a viscoelastic polymer inserted between two dense gypsum cores.

SilentFX is easy to install. It goes up just like traditional gypsum wallboard, with no special tools or training required. For sound attenuation purposes, it works best when combined with CertainTeed’s NoiseReducer™ sound control batt insulation inside the wall cavity. This insulation is made from inorganic fibrous glass and manufactured with a formaldehydefree binding agent.

“It’s like a peanut butter sandwich, where that polymer in the middle helps to break down the sound going through the wall sandwich,” said Bélanger. “It’s more efficient than adding resilient channels or extra layers of gypsum board. With people living closer together the last thing they

Bélanger said CertainTeed tests wall systems that incorporate its gypsum products and its wall insulations with third-party accredited acoustical labs across North America. // JAN - FEB 2022

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FEATURE STORY // KEEPING THE PEACE “Also, if you want to look at it from a sustainability point of view, NoiseReducer insulation has a high recycled content,” said Bélanger. “Silent FX is mould resistant and can be used in fire-rated assemblies. Plus, you will have a very highperforming acoustical wall if you use Silent FX and Noise Reducer together.”

He added that these products are typically used where privacy is more important: bedrooms, home theatres, basements, machine shops, garages and home offices.

CertainTeed offers another noise-reducing solution for home renovations. The company’s Green Glue is a viscoelastic noise proofing compound that is applied between two layers of drywall. It can be used in walls, ceilings and floors

to dampen sound vibrations and provides an economical solution to remedy older construction that did not meet acoustical standards. The company also makes Green Glue sealant, clips and joist tape to deliver additional noise proofing.

In the future, Bélanger sees increased demand for sound attenuation as building codes become more stringent.

“There is talk of future codes prescribing impact sound ratings, which is a whole other realm,” he concluded. “Building codes are evolving to address those needs.”

SOUNDING OUT THE DETAILS When Gino Allegro was creating his new office in the finished basement of his home, he wanted it

Photo courtesy of Johns Manville Canada

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to be as quiet as possible. As the Canadian Sales Manager for building materials manufacturer Johns Manville, he was well versed in sound attenuation and familiar with the current products on the market.

“As the pandemic progressed and became more indefinite, you heard of a lot of renos being done,” said Allegro. “The whole concept was to get settled in a proper office environment. We had the home office cocooning effect happening.”

For his own project, Allegro selected Johns Manville’s Sound-Shield fibreglass insulation, a formaldehyde-free product that can be used to reduce sound transmission through walls, floors and ceilings. Fire resistant, noncombustible and non-corrosive, Sound-Shield can increase STC ratings by up to 10 points when

used with joint caulking and resilient channels attached to drywall.

“Depending on what is in the ceiling, you can use various decorative acoustical suspended ceilings or even put insulation on top of the suspended tiles to allow for greater sound deadening,” said Allegro. “But if you do want to drywall it, you can insulate within the joists and allow for a one-inch air space for soundproofing purposes.”

When it comes to sound attenuation, he said it’s all about the details. Allegro chose a solid door rather than a hollow-core option, and went with 5/8” drywall to deaden sound. The whole project was so effective that his wife must now text him from upstairs, because her voice cannot be heard when the office door is closed.

Photo courtesy of Johns Manville Canada

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FEATURE STORY // KEEPING THE PEACE Photo courtesy of Johns Manville Canada

Johns Manville also offers AP Foil-Faced Polyiso Continuous Insulation, a lightweight exterior sheathing product made at the company’s plant in Cornwall, Ont. Along with excellent insulating properties, the polyiso sheathing provides an STC rating between 34 and 55, depending on the type of gypsum wallboard, cavity insulation, AP Foil thickness, exterior cladding and optional resilient channels used in the installation.

Allegro said that with people negotiating hybrid work arrangements, there will still be a demand for setting up proper home offices.

“The pandemic has really been a game changer in a lot of ways,” he concluded. “I think acoustical demand will continue... I think builders have already introduced sound attenuation to many potential homeowners. If you’re building new, I think it makes sense to seriously consider soundproofing things like master bedrooms, entertainment rooms, laundry rooms and home offices. The raw construction stage is the time to do it and you’re not looking at a high cost at the inception stage of construction, either.”

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A FLEXIBLE FIT As more people look to create quiet home workspaces, international manufacturer ROCKWOOL Group takes care to educate homeowners about residential acoustic solutions.

As the world’s leading manufacturer of stone wool insulation, the company promotes whole wall systems for maximum sound attenuation.

ROCKWOOL’s Safe’n’Sound stone wool insulation is a top performer in those wall systems, for both sound dampening and fire resistance. Designed for interior partitions, including walls and ceilings with both wood and steel stud construction, the product is sold in batts that are flexible and easy to install.

“Safe’n’Sound is a product made from stone, a 100 per cent renewable resource,” said Brendan Van Gool, product marketing manager at ROCKWOOL. “Our product is inherently renewable and sustainable. The main ingredient is basalt rock, mixed with recycled slag from the steel industry.

We melt those down under high temperatures and push them through a machine that spins them into fibres like cotton candy. We add oil

and a binder to make it water repellent and then it gets rolled down the line and compressed to the correct density.”

ROCKWOOL’s channel marketing manager for North America, Carol McQuaide, said one big advantage of the Safe’n’Sound product is its ease of use, making it an attractive choice for the DIY segment as well as professional contractors.

“It’s so easy to work with and has a unique, flexible fit,” she said. “The insulation is easy to cut, no special equipment required, and generates minimal debris. The fit is flexible, and it stays where you put it. Also, there are certain insulation materials that have properties that may degrade over time, but that doesn’t happen with ROCKWOOL insulation. It retains its properties through its life span of 50-plus years.”

She explained that ROCKWOOL has tested several different acoustic wall assembly options using Safe’n’Sound, which is available in a variety of thicknesses for wall, floor/ceiling and I-joist applications. The company publishes an Acoustics Wall Assembly Catalog that outlines

Fire Resistance

What it’s made of makes all the difference.

Water Repellent

Thermal Resistance

Sound Absorbent

ROCKWOOL Comfortbatt semi-rigid thermal batt insulation designed for exterior wall studs

®

ROCKWOOL Comfortboard 80 Exterior and Interior non-structural insulated sheathing boards used as continuous insulation ®

ROCKWOOL Comfortbatt and Comfortboard 80 ®

®

ROCKWOOL Safe’n’Sound Premium acoustic insulation for interior walls and ceilings between floors

®

ROCKWOOL Safe n’ Sound

®

Learn more at rockwool.com

FEATURE STORY // KEEPING THE PEACE the sound reduction performance of its stone wool insulation when used in conjunction with various other materials.

partition. The STC ratings we’ve achieved vary depending on what other materials are used, but they range from 45 to 52.”

“Our product is an acoustic product, tested for noise reduction as part of the entire wall system.

Insulation absorbs sound and adds mass to the

McQuaide said it’s important for homeowners to define their goals for any given space.

Photo courtesy of ROCKWOOL Group

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“The amount of sound attenuation you need will vary from room to room. Bedrooms off a great room, for example, that’s an important space to soundproof. Home offices are huge. Media rooms are huge. Take the time to think about your house and how your family lives in the space and how close your neighbours are. There is a need to control sound in all spaces, to some degree.”

As the demand for urban housing continues to grow, sound attenuation will become even more important. ROCKWOOL foresees increased demand for its Safe’n’Sound product.

“As far as acoustics in general, we are heavily investing in educating our customers about how sound travels through different wall assemblies,”

concluded McQuaide. “Our ROCKWOOL Building Science Team and Technical Support work directly with architects and builders, making sure they understand how our insulation works with other building materials. The information component is something we’re heavily investing in, because we don’t think we’ll see this trend changing at all, and we want to meet the performance goals of the end users.”

It’s safe to say that gypsum and insulation manufacturers have recognized homeowners’ needs, and they’re doing all they can to ensure all’s quiet on the home front. —

Photo courtesy of ROCKWOOL Group

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FEATURE STORY // KEEPING THE PEACE Photo courtesy of ROCKWOOL Group

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FEATURE STORY // KEEPING THE PEACE Photos courtesy of ROCKWOOL Group

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EXCEPTIONAL LEADERS HAVE CLARITY

How to sort your thoughts.

Written by Jill J. Johnson, MBA

Most leaders believe they make good decisions.

They believe they already have clarity about their situation. Protecting the status quo is the norm. Then something significant happens: their financials show losses, revenues stall, clients leave, good employees take better jobs elsewhere.

All executives and board of directors share a desire to resolve the situation when they are in the middle of a complicated or difficult situation.

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But exceptional leaders are unique. They demonstrate a willingness to gain real clarity about what is going on inside and outside their organization. They want a depth of information to understand the truth about what is right and wrong with the strategies they are implementing.

They want to identify the factors impacting their ability to be successful. They take control by looking for ways to innovate their organizations

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to solve their problems, to meet the evolving needs of their customers and to improve their market position. They take the time to SORT their thoughts to gain the clarity they need for success.

SKEWED VIEWPOINT Most leaders believe they are already doing the right things. They believe their products and services already meet valuable needs for their customers. What they don’t realize is their view has been skewed by changes that have gone on around them. New competitors to the market may have significantly altered their historical market position, but they were so certain they were doing a good job they do not realize how much their market has changed.

Exceptional leaders understand staying close to your market is crucial to long-term success.

Markets change over time. They want to understand how their market is changing and why.

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They determine what they need to do to meet evolving market needs. They want to understand what they need to do to compete effectively with new competitors to retain or enhance their market position. They are constantly assessing customer expectations and if their needs may be shifting beyond what they now offer. Their focus is on the future and moving forward with true success. They move on.

OVERCOMING OBSTACLES Sometimes leaders freeze when confronted with the need to take real action. They are so paralyzed by the fear of making a mistake that they make no decision at all. They wait until the situation is dire and then react by putting out the inconsequential fires. By focusing on the wrong things, they ignore the main fire that rages all around them. Their inability to address the real issues before there is a complete crisis results in chaos. They blame

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others. Their people don’t trust them. Their boards lose confidence. Leaders without clarity and they can do great harm to their organizations.

Exceptional leaders expect their situations will change and they have the discipline to continually look forward and assess what changes may affect them. They are always on the lookout for ways to innovate and revitalize their products, services and organizations. They look for new ways to grow, evolve, and succeed. They understand periodic strategic corrections are a necessity to overall long-term success.

RIGHT INFORMATION Most leaders believe they already have enough 30

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information. They apply the same set of assumptions to their decision making that have historically worked for them. They use the same data sources they have always used. They rely on the opinions of underperforming staff to explain the challenges they face rather than engage in the proper due diligence to find out the underlying causes for their organizational difficulties. They fail to understand the significance of how changes in external market forces can impact consumer expectations or their long-term survival.

Exceptional leaders look for more than a superficial answer. They don’t stop looking at the first 10 answers that pull up in their Google search.

// BUILDING BETTER BUSINESS They look for the pearls of wisdom buried deep in the data and they are not afraid to find advisors who will help them find the truth and interpret it.

Getting the right information for real decisionmaking is hard work. They know that it requires a significant effort to re-consider every current assumption and look for changes in the trends and patterns of the data. Doing that without a biased view is even harder. They are willing to invest the time and money to bring in a fresh and different point of view to discover the truth.

THE TRUTH Most leaders believe they already have a

complete understanding of what is going on. Yet the fundamental reason for a lack of clarity at the top is usually because no one tells them the whole truth. Employees tell their leaders what they think they “want” to hear. People are penalized for telling the truth. Cultural paradigms cause employees to withhold candid feedback because they don’t want to displease another with bad news. Worse, some leaders are not able to listen to a divergent perspective. As a result, these leaders lose control of the situation and lose their ability to implement corrective actions before things go completely haywire.

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Exceptional leaders understand clarity begins with a real desire to see the truth of the situation.

Truth gives you information. Information gives you insight. Insight gives you clarity to set the right priorities and focus your people on the most critical activities designed to create success.

These leaders find it refreshing to have someone around who will tell them what they don’t necessarily want to hear, but that they already suspect is true. They use objective advisors to get to the truth and to help them work through the issues to create real and lasting improvements that move their organizational success forward.

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FINAL THOUGHTS Getting clarity can be frightening. Clarity about your problems and challenges can scare your board and staff. It can be humbling to realize that critical strategies you previously implemented are now the cause of the problems now facing your organization. Yet when you have clarity, it becomes much easier to prioritize what needs to be done to resolve the issue or improve it. —

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THE RELATIVE CALM AFTER THE STORM

Lumber prices and volatility may still be high but aren’t expected to reach 2021 heights.

Written by Lawrence Cummer

Last year saw lumber prices soar to record heights due to reduced production, supply chain challenges, and the increased demand from new home construction and R&R activity — and then even more quickly plunge back down.

The supply-demand imbalance sparked by COVID-19 in the Spring of 2020 continued into 2021, causing prices to steadily climb until, in late May, there was what Michael Sivucha, vice-president of commodities at Taiga Building Products calls “the start of a historic price correction.”

“Before the correction, the market had a seemingly insatiable appetite, and it was largely fueled by the Box business’ push to meet their view of DIY and contractor demand,” he says. The speed at which the consumption of wood products fell, and the fact that in 2021 lumber pricing made a surprisingly small number of notable changes in direction — despite its extreme rise and fall — disrupted the commodity’s flow, Sivucha says.

Fortunately, those extremes, exacerbated by the ongoing COVID-19 pandemic, will not likely show a repeat performance in 2022, according to Kelvin Johnston, senior buyer for commodity lumber and panels at Castle Building Centres Group. But the market won’t be exactly free of excitement. “We all agree that [lumber] prices will continue to trend higher than pre-pandemic, but that the prices we saw in 2021 are unlikely to return,” Johnston says. “This is because it was pure speculation that had driven prices to be twice what they’d ever been at before.” “However, it is a commodity we are dealing with so one should never say never”.

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Photo courtesy Taiga Building Products // JAN - FEB 2022

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FEATURE STORY // THE RELATIVE CALM AFTER THE STORM Photo courtesy of AFA Forest Products

Lessons were learned that should help reduce risk in the years ahead, says Mike Park, vice-president of national commodities at AFA Forest Products.

“Inflation, specifically in the lumber and building materials markets, demonstrated how impactful high prices can have on consumer spending. 2021 showed us the limits consumers we’re willing to absorb, which provides us with better tools to project the balance between supply, demand and how costs impact both.”

understandably dried up. While prices collapsed, Johnston said it left many competitors who had overstocked on lumber and plywood at peak prices, and unwilling to drop them, unable to move inventory. “So many of the stores in our industry were struggling with too much inventory, it was too high priced and they had never lost money on commodity wood products,” he says. “So, when presented with the position of having to sell something at a loss, they didn’t know how to.”

THE HIGHS AND LOWS OF 2021 Once the prices peaked in May, consumer demand

On the other hand, Johnston has worked hard communicating to Castle dealers the importance // JAN - FEB 2022

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FEATURE STORY // THE RELATIVE CALM AFTER THE STORM of selling off the high-priced inventory they had, “and then get back to making money again.”

Treaters too were hit hard by the pricing plunge, Johnston says, ending up “going long” on lumber to ensure they would have enough pressure treated to supply demand and left holding the bag.

The challenges caused by such massive inflationary pressures and massive depreciation in value of lumber and panels are ongoing, suggests Stephen Marshall, vice-president at CanWel. “[Anyone] that owned inventory

Photo courtesy of CanWel 38

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during [the] plunge experienced deflation in inventory valuations and the challenge of offside inventories still persists today throughout the system in North America.”

But it wasn’t just the peak price that caused consumers to lose interest in lumber and panels, Marshall suggests. He attributes it to the combination of sticker shock and increased freedoms from pandemic lockdowns.

“The volatility in the price movements, and the rapidity of the changes, have left many in the industry determining the best path forward

Photo courtesy of CanWel

in how to manage price risk,” Marshall says.

“The industry has and is still taking inventory write-downs to more accurately reflect market replacement costs.”

After the peak prices of May, subsequent bottoming out in August, October saw a small rally. More recently, with the ongoing logistics issues in British Colombia, prices have taken off again and will enter 2022 on an upward trajectory once again. Prices became more stabilized moving into 2022, and Johnston expects a calmer market but not as steady as some years past.

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VOLATILITY MOVES INTO 2022 Prior to the pandemic, Johnston says lumber prices might shift $20 in a week, but even as prices became more stable at the end of 2021 a move of $50 up or down in one day was not surprising. “I don’t think that’s going to go away this year,” he says. “And that makes a lot of people unsure of when scared to buy.”

He says with the speed the market changes currently communication is key. “Because of the volatility, you really need up-to-date information. I try to provide that to our dealers,” he says. “I’d say

FEATURE STORY // THE RELATIVE CALM AFTER THE STORM my most important role is to act as a center of communication on the lumber, plywood and OSB markets.” It’s a role that’s, of course, become more vital amidst the market volatility, helping dealers navigate the rapid changes so that contractors and consumers can get what they need to complete their jobs.

Marshall expects further volatility in 2022 and the years ahead. “We may not see long-sustained price movements, but we will likely see rapid price changes in short time periods,” he says. “Price movements of 10 to 20%, both up and down can happen now in a few weeks.”

“All lumber buyers, sellers and users need to ensure they are covered with sufficient inventory

to reduce or eliminate their price risk exposure,” he recommends. “And if material is bought or sold at a specific price, strong agreements need to be in place to ensure buy/sell agreements are satisfied, material is received at the contract price and deliveries are met.”

He suggests there will be less aptitude in the year ahead for lumber and panel sellers to extend longterm pricing agreements unless the inventory is owned and fully costed, or the price is hedged in some fashion, or tied to pricing indexes.”

STILL HIGH TIDE FOR THE BUILDING INDUSTRY As suggested, while wood prices have come down from 2021, industry watchers all agree they will remain higher than the industry saw pre-COVID.

Photo courtesy of CanWel

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The industry faces supply chain issues beyond those related directly to production, but which ultimately impact the lumber market and slow down building projects. For example, Kelvin points to situations where a lack of products like truss plates or subfloor adhesive have ground building to a halt.

Sivucha echoes the sentiment. “As with all aspects of our daily lives, COVID has disrupted the supply chain, both domestically and abroad (for imports/exports) and has had an inflationary impact on pretty much all inputs to our business.”

“Time will tell on how much of this is transitory vs. permanent, but it is expected to be impactful in 2022.”

Marshall expects the market will see higher lows on wood and panel pricing moving forward,

Photo courtesy Taiga Building Products 42

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as one of the few world commodities that had not kept pace with others. “We believe the days of wood-based products being undervalued are over,” he says.

A few market forces are going to continue to drive the popularity of forestry products in 2022, not the least of which is still the pandemic and its new variants. Marshall expects the pandemic to continue to influence consumer behaviour, as it has over the past two years, resulting in good business for builders, contractors and the building industry.

“We also expect more climate and weather events, calamities if you will, to influence the supply chain and to impact new replacement structures,” he says.

FEATURE STORY // THE RELATIVE CALM AFTER THE STORM

Of course, demand for new housing hasn’t gone away and will continue to play a major role in the market. Park says he expects “strong housing throughout 2022 and a return to more normal levels of R&R activity.”

He also suggests challenges with production and logistics will continue through the year. “Logistics is a common theme in many segments of the market and Forestry is no different. Lead times are growing, putting more pressure on suppliers and dealers to maintain workable inventories. As mentioned, prices on average are expected to be lower in 2022 versus 2021, however price volatility will continue through the year.”

How to help insulate yourself against the risks and volatility? As always, communications and collaboration are key, suggests Park: “Plan ahead, work closely with your Castle yards in order to maintain reasonable and realistic delivery expectations.”

Sivucha agrees on the value of strong communications, adding that good, data-driven business practices are vital during such uncertain times. “Curveballs are inevitable and the impacts unpredictable. This underscores the importance of good business disciplines, analytics, a strong internal culture and meaningful, consistent communication with vendors and customers.” — // JAN - FEB 2022

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