Universal Supply Co.
 General

July Market Update

Nov 12, 2013

As we reach the mid-point of the year we all are feeling the effects of an increasingly even and robust recovery within our industry. Lead times from manufacturers have increased, trucking from wholesalers and mills continues to be in high demand and labor in the field is tight and appears to be tightening even more as we head farther into the year. We've seen some softening within the commodity markets over the last few weeks but we are still higher than last year at this time. It appears that the market has found a sustainable level and is showing some slight rebound after this most recent decline. We would expect this slow climb to be the norm for the rest of the year barring any unforeseen storms. It's interesting to note that more mills in both framing lumber and panels are coming back on line and capacity within the system is increasing. This should help stabilize prices in the near term. Please work with your WBS sales person to get a perspective on how these developments may affect your projects specifically.

MULTI-FAMILY GAINS MORE SHARE OF HOUSING STARTS

As activity slowed in the second quarter, forecasters tracking U.S. housing starts have dialed back projections for single-family housing, while increasing the share of new home start-ups in the multi-family sector. According to Random Lengths, the decrease in single-family starts is due to recent gains in interest rates, slowed employment growth and existing home inventory. Although housing start projections have been decreased, the forecasts are still 4% higher than projections from January, upholding the slow and steady growth calculated for the remainder of this year and into 2014.

NAHB SURVEY FINDS COMMONALITIES FOR BUILDERS AND SUPPLIERS

A recent survey by the NAHB provided data on building material costs across the U.S. from May 2012 to May 2013 as reported by both builders and building material sellers. Builders cited the following frequently purchased materials to have recent price increases (in the order of largest percentage): framing lumber, OSB, plywood, gypsum, trusses, ready-mix concrete, roofing materials, and cement. Dealers also purchased the same materials most often, but cited a higher increase in cost. These findings were consistent across all regions. Current cost hikes can be attributed to a slow recovery starting at the manufacturers' level. Builder Online notes, "Manufacturers experienced the same collapse in their markets. After ramping up capacity to supply the construction of more than 2 million homes a year, home building fell to barely 0.5 million." The article closes with this reminder: "As production comes back, resources will return but it will take time. The slow housing rebound may be a blessing in disguise giving the rest of the housing support system time to rebuild."

Find the full article on Builderonline.com.