WHAT HAPPENED IN 2020?

The virus really put 2020 in a spin. For the first few weeks, it looked like it might be a disaster for lumber retailers. Although the construction industry was spared complete shutdown by becoming an essential service, customers initially stopped buying. Supply chains for lumber products were disrupted as ports closed and suppliers worked out how to manage the risk and logistics of doing business with COVID-19.

The industry was already on the way to having a challenging year even before COVID-19 came along. Bad fire years, mill disruptions and shortages in the US, coupled with growing US housing demand, had already reduced supply availability in Canada.

Then something unexpected happened. Canadian demand for building materials went through the roof.

With lockdowns, Canadians found themselves spending a lot more time at home. At the same time, the Canadian government decided to pump over $322 billion into additional financial support payments, averaging over $10,000 per adult. With nowhere to go and nothing to do, many decided to reno their homes with the extra money. Even with record prices, many commodity and specialty items sold out.

Big retailers benefited. Home Depot stock skyrocketed from a bottom of $152/share in March 2020 to a high of $291/share by September. But many smaller lumber retailers also did well if they priced their product right in the face of rising wholesale prices, low supply and high demand.