LBM Retailers Set for Modest Turnaround

After a period of sharp declines resulting from the failing housing market and declining economy, the retail lumber and building material industry is set for a modest turnaround, thanks to a series of positive changes that will affect revenue over the next five years, according to a new IBISWorld report.

Over the past five years, revenue for LBM dealers has grown at a minimal average annual rate of l.8Vo.

According to IBISWorld analyst Kerry Coughlin, "The volatile cost of lumber, which accounts for about 65.4Vo of industry sales, has also burdened industry firms over the period."

The trend has made it difficult for retailers to anticipate future spending and control costs. Furthermore, the industry has experienced intensifying competition, especially from home improvement stores, which offer the added convenience of one-stop shopping and. at times. lower prices.

IBISWorld estimates that profit declined to industry lows in 20 10, only to recover in 2Ol3 with margins reaching 2.6Vo F alling margins caused some operators to exit the industry or consolidate. As a result, the number of enterprises fell at an average annual rate of 1 .77o to 43,692 in 2013.

"After facing stagnant conditions following the recession, the housing and nonresidential construction markets finally began making significant strides in 20 I 2. and, strong gains in both sectors are expected for 20 13," said Coughlin. IBISWorld projects industry revenue jumped lO.l7o to $96.3 billion in 2013, driven by an increase in residential construction investment and higher spending on home improvements.

As population growth and pent-up demand drive up housing starts, and improved economic conditions boost demand for repairs and renovations, sales will continue to rise, albeit not as high as pre-recession levels.

Stanley Dean Richardson Sr.,78, longtime Decatur, I1., lumberman, died Nov. 13 in Decatur.

He started his lumber career with Hunter-Pogue Lumber, working there 36 years before joining Sims Lumber.

Scott G. Harmon. 41. former employee of Webster Lumber/Stella Jones, Bangor, Wi., died Nov. 29 in Bangor after a battle with ALS.

He spent 2l years with the firm.

Paul D. Mathews, 84, founder of SII Dry Kiln, Lexington, N.C., died Dec. l0 in Lexington.

He founded SII Dry Kiln in 1969, serving as president until his retirement in 2004.

Robert Casper, 92, founder of Casper True Value Hardware, Lake Zurich.Il.. died Nov. 30.

During World War II, he served with the Air Force.

Travis Nathan Canepa, 48, foreman of Hughes Lumber, Muskogee, Ok., died Nov. 24 in Muskogee. He joined Hughes in 1998.

Richard Marvin Ingram Sr., 80, retired owner of Shore Building Supply, Lewes, De., died Nov. 29.

He founded the family business in 1969 and retired l0 years ago.

Duane Martin Kleiman. 77. founder of Kleiman's Wood Products, Custer, S.D., died Dec.12 in Custer.

He started his career as manager of Custer Lumber Sawmill, Custer. He launched Kleiman's in 1973.