As economies return to normal, companies and consumers face shortages of industrial commodities, such as steel, drywall, aluminum, and microchips across the globe. Consequently, prices are increasing at a staggering rate. This development is being monitored closely, particularly at the global level, by the World Bank. And while rising prices are generally considered as a sign of a re-vitalized economy after the COVID-19 pandemic, the lumber shortage cannot be shrugged off easily.
Between 2015 and early 2020, lumber costs fluctuated between $200 to $400 per thousand board feet. Yet, on 7 May 2021, prices spiked at an all-time high of $1711.20. This means that beams, planks, and the like now cost more than three times as much as only one year ago. After the coronavirus outbreak, sawmills all over the world cut back on production in response to social distancing measures and anticipation of a deep recession. For instance, US wood production was scaled down by 16% from January to April 2020, heavily affecting the housing industry. In the US, on 4 May 2020, 10,5 single-family homes could be built with $50.000. On 5 May of the following year, however, the same amount of money only sufficed for 2,1.
At the same time, home improvement projects boomed as people found time to take up Do-it-yourself ideas or other kinds of renovations. Between March 2020 and March 2021, Americans spent 23,6% more on building material and the like. In addition, historically low mortgage rates enticed people to buy new homes, particularly those from one of the largest generations in human history, the millennials. While, as a consequence, active listings halved within a year after the coronavirus outbreak, US home construction was on the rise—requiring plenty of lumber and spurring import growth. Despite full-production to catch up to this demand, inventories worldwide have plummeted, and stock records still remain at a record low in the US, Canada, Sweden, and Germany
Though some argue that the pandemic set off this current global lumber frenzy, the scarcity of this formerly cheap and abounded commodity also conveys pressing environmental challenges. While COVID-19 almost exclusively captured the world’s attention for the last year and a half, climate change has been steadily upsetting the environment’s natural cycle, translating into real economic ramifications in the lumber market. Over the last two decades, the world’s timber supplies have been drastically diminished by pine beetle plaques as winters were too warm to keep them at bay and allowed populations to grow. In the Canadian province British Columbia, 60% of its marketable pine have been killed in consequence. In addition, our fast-warming planet has been driving wildfires as hotter temperatures; and lengthier droughts lead to longer and larger fires. In 2020, around 10,3 million acres were burned, breaking the 2015 record of 10,1 million acres.
Going forward, climate affects the sustainability of wood volume globally. And in doing so, highly volatile and unpredictable lumber prices will no longer be unusual in the future. Though consumers all around the globe groan upon seeing exorbitant lumber prices, their attentions are focused on the wrong concern. Cause while lumber production slowed, climate change kept its pace.
Edited by Dorothy English; Photo credit: Markus Spiske, Unsplash