Rising Timber Pricing
How Rising Timber Prices Affect the Construction Industry
Timber is one of the most essential and versatile materials in the construction industry. It is used for framing, flooring, decking, fencing, roofing, cladding, joinery, furniture and more. However, in recent months, timber prices have soared to unprecedented levels, creating challenges and opportunities for builders, suppliers and consumers.
What is driving the timber price surge?
There are several factors behind the rising timber prices, but the main one is the imbalance between supply and demand. The global pandemic disrupted the production and distribution of timber, while also stimulating a surge in demand for housing and renovation projects.
According to the ABC, lumber futures in the US broke a record in May 2021, surging beyond $US1,700 per thousand board feet for the first time, a meteoric rise for a commodity that was sitting below $US400 this time last year. The rocketing price is being driven by America’s housing boom but also appears to have accelerated in recent weeks as investors pile in.
The US is not the only market experiencing a timber shortage. As Tiger Sheds reports, timber prices have risen 130% all over the world since the start of the Covid-19 pandemic. In May 2021, the Guardian reported that timber has become 80% more expensive in the last six months.
In Australia, the situation is similar. Stockhead notes that the price of lumber has skyrocketed to $US1,048 per thousand board feet, up nearly 400% from a year ago – a result of reduced production during COVID-19’s early months, and a DIY and housing boom sparked by low interest rates.
The supply of timber in Australia is also affected by other factors, such as bushfires, environmental regulations, export bans and trade tensions. For example, the ABC reports that Allied Natural Wood Enterprises bought the Boral timber division for $64.5 million in July 2021, becoming the largest hardwood processor in NSW. However, the company faces challenges in securing enough logs to meet its demand, due to reduced availability from state forests and private plantations.
What are the implications for the construction industry?
The rising timber prices have significant implications for the construction industry, both positive and negative. On one hand, higher prices mean higher costs for builders and contractors, who may have to pass on the extra expenses to their customers or absorb them into their margins. This could affect their profitability and competitiveness, as well as their ability to complete projects on time and on budget.
On the other hand, higher prices also create opportunities for innovation and diversification in the construction industry. Builders and contractors may look for alternative materials or methods to reduce their reliance on timber or to increase their efficiency and productivity. For example, they may use more steel, concrete or composite materials; prefabricate or modularise some components; or adopt digital technologies such as BIM or drones.
Moreover, higher prices may also stimulate more investment and development in the timber industry itself. Suppliers and processors may seek to increase their capacity and quality to meet the growing demand and capture more value from their products. They may also explore new markets or niches where they can offer competitive advantages or solutions.
How can DAL Construction help you with your timber needs?
At DAL Construction, we understand the challenges and opportunities that rising timber prices present for our customers and partners. We are committed to providing high-quality construction services that meet your expectations and budget. We have extensive experience and expertise in working with timber and other materials for various types of projects, such as residential, commercial or industrial buildings.
We also have strong relationships with reliable and reputable suppliers and processors of timber and other products. We can source the best materials for your project at competitive prices and ensure timely delivery and installation. We can also advise you on the best options and solutions for your specific needs and preferences.
If you are looking for a trusted and professional construction company that can handle your timber needs with excellence and efficiency, look no further than DAL Construction. Contact us today to discuss your project and get a free quote! 
