THINKING Ahead By Chad Warpinski
Breaking up “scar tissue” from COVID T
here’s no question
that building materials, after the initial chaos of the COVID-19 pandemic, bounced back strong and has flourished over the last couple of years. It goes without saying, however, that this boon has not been untouched by challenges. Just like the human body might sustain scarring after trauma, the industry is bound to experience residual fallout after a major business disruption. We saw it from 2008 to 2009 with the Great Recession, when demand went off a cliff following a huge and prolonged run-up. Countless companies went under, joblessness soared and construction workers had to find new vocations. The impact was palpable, and the hard-hit lumber industry spent the next 10 or 11 years basically treading water—until the next major disruption. Although that event, COVID-19, propelled us in a more favorable direction, we are nonetheless left dealing with some “scar tissue.”
Pain Points
Some measures of pre-COVID-19 normalcy have been restored, but many of the problems that arose or were exacerbated during the public health emergency persist. The supply chain continues to struggle, for example. There are weather issues, COVID-19 issues, log availability issues, and unresolved trade issues between Canada and the United States. The list goes on, but a couple of areas are particularly troubling.
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• Labor shortage is out of control at all stops along the supply chain, and it’s probably going to stay that way for the next five to 10 years. We can’t do everything we used to get done in a day with all of the other issues still in play. So, then, who’s going to do the work? It’s not as if we can just flip a switch and bring in a bunch of people to get everything done. • Commodity prices have skyrocketed, helping the average price of a single-family home in the United States continue its upward trajectory. That figure now stands at above $300,000, which is out of reach for many, especially first-time buyers. I’ve heard the arguments that today’s
n The Merchant Magazine n June 2022
younger generations care less about ownership, but I disagree. I think everyone still wants to own their living space—the pandemic obviously highlighted that. Homeownership is still the ultimate goal for a lot of people, and as an industry we’re at the front lines of making that possible.
Lumber, Heal Thyself
That being said, the industry does have opportunities ahead to fix some of the areas where it’s hurting. Self-promotion: For every worker another industry lands, it’s one fewer that we have the opportunity to capture. Once they come in, people may move around to different employers, but they tend
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