Jeremy Bowman is a contributing analyst for The Motley Fool, covering consumer goods, tech, and retail.
Article Title: Lumber Prices Poised to Stabilize Amid Rising Interest Rates, Cooling Housing Market
However, after a whirlwind performance during the pandemic and during the economic recovery, the critical construction material is on the path to stabilization, says Jeremy Bowman, a contributing analyst at The Motley Fool.
“The decline in lumber prices is also part of a broader pullback in commodities prices, as traders seem to be anticipating a more normalized global economy without the supply chain woes that have hampered the economy over the last year or so,” Bowman told The Epoch Times. “It seems like the lumber market is finally starting to normalize as the housing market settles down and COVID-related challenges are mostly gone.”
Although lumber prices have been trending lower for much of the year, near-term factors could still support elevated prices, Bowman notes.
One of these is the immense transportation delays in western Canada, which is “a key lumber market for several operators,” Bowman says. Marine, rail, and trucking backlogs—driven by the international supply chain crisis—have significantly impacted lumber and pulp companies this year, slowing down the rate of output and shipments.
Labor shortages are still prevalent in the industry, forcing companies to pay higher wage rates, which have taken “a bite out of profits for timber harvesters,” Bowman says.