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.
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
