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Market Monday – BBQ, Beer and Bikinis

Posted in What's New by Kate Whittemore

Was that title “BBQ, Beer and Bikinis” enough to get your attention?

I sure hope so, we wish some of our other advertising could be that eye catching, but, while I can convince Ed(our purchasing manager) to do the audio for our TV and radio commercials, I am certain no one wants to see an ad with him in a bikini guzzling beer beside his grill and he isn’t exactly willing to do it either.

In all seriousness though, that relaxed flavor of summer that we all hope for seems to contaminate hamper productivity in the building sector. While most outsiders think the construction industry is booming all summer long, actually it tends to die off in July and early August as the temperatures make it difficult for crews to work long days and many families are spending time travelling or at least taking some time off.

Heck, even just the offer of free hot dogs and a break to play with new power tools enticed many contractors to stop work for a few minutes and visit us at our Milwaukee Bonanza last week.

Take for instance our own work environment, as the summer season swings into full gear vendors are asking our staff to join them for fishing outings, clambakes, golf tournaments and bbq’s. While we get to build strong business relationships at these events, attending too many, in conjunction with vacation/graduation/wedding season, means that staffing becomes a balancing act at times. While we do offer incentives for our staff to vacation in the winter, we all know how enticing it is to be able to kick off to the beach in the middle of summer when kids are off from school and it seems too hot to work.

Likewise, many contractors schedule their large orders of materials for the first couple of months of construction, which keeps them busy framing, insulating and doing other rough carpentry before the finish work starts a few months later. This staggering in the need for materials seems to allow for less demand on us between the framing and the finish work for several weeks during July/August.

At Home Central our peaks usually come from May 1st – July 10th and August 25th – late October, but this is all weather dependent. As winter crept into spring this year, that May 1st start-up was significantly delayed and our sales have only begun to truly show an improvement in the last 2-3 weeks. Likewise an early cold snap, wet weather or a long warm fall can all have a major impact on how sales play out during our busiest season, September/October. But similar to the week between Christmas and New Years, the week surrounding July 4th tends to be a really busy DIY time for us, as people take time off from work, but often stay home instead of travelling.

What do they do while at home for those weeks? Whatever their honey-do-list says apparently!

All that being said, the building materials market strongly reflects those same trends that we see in our own business. Prices fluctuate depending on supply and demand generally, and many mills shut down for several days around July 4th and many others have weeks set aside in the summer for entire plant shut downs. These closures, similar to the Christmas/New Years closures help keep prices elevated through a normally slower time.

Add the ever-present trucking issues that we have seen increasing over the last 12 months+ and it can be tough to get some types of materials in a timely fashion during the summer. In our business we refer to late summer as “watermelon season,” which merely points to the fact that shipping produce appears to be more profitable for truckers and we see a more dramatic shortage of trucks in this time frame.

Recent reports have mentioned load to truck ratios somewhere around 35:1 and combined with holidays the ratios can be 45:1. These kind of delays in shipment have helped mills keep prices higher as buyers fight to get the materials they need when they need them.

This year is no different and panel prices as well as lumber prices seem to be climbing steadily right now. OSB prices have been one of the few things to remain close to flat recently, but as the 4th approaches the price will probably continue to move slightly upward.

The only other building materials slated for price increases seem to be metal products, like metal studs and ceiling tile grid systems. Other commodities seem to be holding steady through the summer, after their late-winter/early-spring increases.

While we struggle to keep inventory flowing adequately through all of these trucking issues and mill closures, our attention has been focused on trying to match inventory to the current demands. Those demands are often treated lumber and gravel mix in June, but that dies off in July followed by increases in roofing and siding demand in late August. Let us know when we have a shortage that can’t be fixed by substitution so we can record it for purchasing decisions next year, but please have patience as we fight to balance trucking, supply and unexplained demand fluctuations.

Some of us will be dreaming of margarita’s on the beach, but others dream of increases in new home construction  and less delays in trucking. Whatever your cup of tea may be, summer dreaming is hard to avoid when the weather gets hot, but we will try to keep the BBQ’s, beer and bikinis to a minimum during work hours!

Keep letting us know of your upcoming projects so we can work with you to make your projects come to life quickly and affordably. And don’t forget to check out some of our HOT summer deals each month and see what items might help you finish a project or relax by the pool!

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