Manufacturing, Lumber prices

May 03, 2021

Manufacturing activity slipped in April from March but still remains well into positive territory as the country is almost fully reopened now. The ISM Manufacturing Index fell to 60.5 last month, below the 65.3 expected and down from 64.7 in March. This figure indicates expansion in the overall economy for the 11th month in a row after contraction in April 2020. A company spokesperson said, “Companies and suppliers continue to struggle to meet increasing rates of demand due to coronavirus (COVID-19) impacts limiting availability of parts and materials.”

Lumber continues to soar and now sits at $1,600 per 1,000 square board feet. Last year this time the price was $342. This rise is too much too fast and will negatively impact new home sales at some point. The surge is due in part to the industry shutting down four months last year with surging demand in the current environment. The CEO of the National Association of New Home Builders, Jerry Howard, said there were “dark clouds” in the new home sales outlook when lumber was at $1,000. Mr. Howard has to be more concerned now.