Homeowners who resisted the urge to renovate during the first 18 months of the pandemic may find now is their chance, as lumber prices that soared to dizzying heights in the spring have crashed back down to earth.
At family-run Peacock Lumber in Oshawa, Ont., owner Glen Peacock said retail prices have “collapsed” in recent weeks. An eight-foot-long, two-by-four inch piece of framing lumber that cost $12.65 on June 1 is now selling for $3.95, Peacock said — basically what it would have sold for before the boom.
“It was amazing it went as long as it did before people said, ‘This is too much money,’ ” Peacock said. “People who waited, if they could, to do their projects are going to be in a much better position.”
A pandemic-driven surge in home renovations and do-it-yourself projects sent shock waves through the home improvement and construction industries earlier this year. North American lumber prices hit record highs of more than $1,600 US per thousand board feet in May — three times higher than pre-pandemic levels.
The price roller-coaster had customers pre-ordering lumber months in advance to ensure supply and even resulted in a spate of opportunistic thefts from construction sites across North America.
But the ride has come back down even faster than it went up — and that means many retailers have been stuck trying to get rid of product they purchased at higher prices.
Many lumber yards have drastically cut back on production until the backlog of unsold wood moves. (Robert Short/CBC)
“With lumber prices falling as fast as they did, it forced everybody to sell their overpriced inventory at a loss,” said Joel Seibert, owner of Mountain View Building Materials just outside of Calgary. “What would have been the ideal situation would be for the price to take twice as long to come back down as it did to go up.”
Liz Kovach — president of the Western Retail Lumber Association, which represents retail lumber, building supply and hardware stores in Western Canada — said the pandemic price bubble burst with the arrival of summer. Warmer weather and the easing of COVID-19 restrictions across the country resulted in Canadians travelling more and spending less time on projects around the house, she said.
Retailers slashing prices
“It’s been a challenge on the retail side,” Kovach said. “We’ve seen a lot of blowout price sales, just so that they can move the materials.”
The plunging prices have already led to curtailments and reduced operations at sawmills. Vancouver-based Canfor Corp. said at the end of August that it will run all of its B.C. sawmills at 80 per cent capacity until market conditions improve. Conifex Timber Inc., also based in Vancouver, announced Aug. 20 that it would curtail lumber production at its Mackenzie, B.C., sawmill for a two-week period.
The rapid rise in lumber costs earlier this year added “tens of thousands of dollars per home” to new home construction costs, said Kevin Lee, chief executive of the Canadian Home Builders’ Association. And while consumers may already be benefiting from lower prices at home improvement stores, homebuyers signing new construction purchase contracts are still seeing elevated prices.
WATCH | High lumber prices were adding up to $30K to the price of a new home:
Price of lumber skyrockets after pandemic disrupts supply chain
6 months ago
The pandemic has disrupted supply chains so much that the price of lumber has gone through the roof. 1:58
“Builders still have to clear their inventories of having purchased higher-priced lumber. It takes a while to clear the system,” Lee said. “Yes, lumber prices from the mills came down dramatically over the summer, but that’s unfortunately taken a while to reach the rest of the industry and consumers.”
Lee said when it comes to new home construction, pricing is being complicated by ongoing pandemic-related supply chain challenges. While difficulties related to lumber have eased, home builders are still dealing with delivery delays and price inflation on everything from plumbing and electrical products to kitchen cabinetry.
“It doesn’t compare to the three to five times price increases we saw with lumber, but I’d say on average, we’re seeing 10 per cent increases on everything, including the kitchen sink,” Lee said. “And we are still seeing delays on closings, just because of an inability to get products and materials.”
In a note to clients earlier this week, RBC Dominion Securities analyst Paul Quinn said with the arrival of fall, lumber markets are already beginning to tick slightly higher. Home centres are noticing increased traffic as customers try to finish projects before winter, Quinn said, and retail demand tends to be a leading indicator for lumber pricing.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
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