Tag Archives: lumber prices

BIG Inflation or Temporary Blip?

That’s the question most economists are asking themselves. So is the Bank of Canada and the U.S. Federal Reserve in order to set interest rates.

Add my vote to those predicting the spike in inflation is temporary and only part of the post pandemic recovery. Pent up demand will do that – but it woudn’t or shouldn’t last. One of the measurements has already shown that. Lumber prices have collapsed to their 2020 levels or lower (but only in the U.S. so far). So have copper, crops and gold prices. If inflation where heading up, those would be among the first places to show it.

Yes, energy, food, and housing are still way up. But remember that these are essentially monopoly pricing areas. Without real competition to bring down prices, normal market forces of demand and supply don’t apply as much – or rapidly. OPEC sets oil prices, as one example. And in the housing market, a new report shows that 85% of condo sales in Canada are to investors. Food prices (already down in the U.S. as well) go up instantly here in Canada (even though our dollar is pretty strong at around 80 cents). But most cities have only two major competitors. Thus it doesn’t take much for them to pass on price increases, but they seem to “forget” to roll them back when costs go down – way down.

Lumber Price Plummet

I live in a new subdivision where a bunch of neighbours are holding off building their fences and decks. It’s not only an expense most first-time new home buyers don’t consider, it’s also the price of lumber this year. The massive spike in prices has at least a half dozen of them thinking “next year.” But that’s all over with…but only in the U.S.

Lumber prices have collapsed, giving up all of their 2021 price spikes. But that’s only in the U.S. So, right now, you can buy lumber at 2020 (and lower) prices in the US, paying the exchange, duty and tariffs. Yet, here in Canada, there are so few retailers that they, along with the producers are taking their sweet time dropping prices. NOT nice!