You soon might have to tell your buyers to stop relying on the spot market and give up treating distributors as your yard’s stockroom. Many of the same signs that are pointing us out of the new-home construction trough also are directing us toward what could become a time of commodity shortages, allocations, and price spikes. And if America fails to find more truck drivers, those problems could get worse and last longer.
Industry officials and experts say the supply chain is stretched so tight that even relatively modest growth in home construction will outstrip the ability of mills and manufacturers to shift goods. In February, an executive for one engineered wood manufacturer predicted trouble when housing starts reach an annual rate of about 700,000. On April 25, both the National Association of Home Builders and Macroeconomic Advisers forecast starts would top 715,000 this year. That would be a 17% gain from last year’s 610,000 starts.
Industry experts note that manufacturers, like many dealers, have been operating in the red in recent years so they lack cash to grow. Mills also remember the false dawn that came in 2009 when what looked like a homebuilding revival turned out to be artificially inflated by tax incentives. As a result, they’re doubly committed to seeing sustained growth in demand before they start retooling plants and reopening mothballed facilities. And once they finally do decide to add a second shift, it can take months before those workers get hired and production starts to rise.
Making matters worse is the 16% decline in the number of truck drivers on the road between 2008 and 2011. Analysts say the dropouts aren’t just related to the economy; they also are leaving because the job has stopped paying competitve wages. Some truckers found they could do better collecting jobless benefits than going back on the road.
