The Ro-Mac Lumber Whole House Commodity Index (Index) slumped 2.4% to $26,643.27, primarily on lower prices in wood commodities and market pricing for roofing products. Supply appears to have outpaced demand for the first time in 2012, which seems to be softening somewhat. Many in the supply chain belief the uncertainty in the market will remain until the outcome of the U.S. presidential election. This should keep prices flat, as most numbers appear to have bottomed out.
The next few months could be negatively influenced by the election, holidays, and a forecast of a colder winter. The market will probably find a cradle to sway back and forth in over the next three months with spikes in certain species and sizes, as supply does not match demand. Builders should be very aware to not price next February’s projects at October’s pricing.
Here are some of the notable price movers this month:
All eyes are on the presidential election. For many, the results will determine the market direction if real certainty can be achieved. It appears that most activity is on hold for the next 30 days, until the political dynamics are sorted out. This election really does mean a lot this year.
The forecast this year is for a much colder winter compared to last year. If that occurs, sales compared to last year could really look dismal, which could damp down enthusiasm. Hold on, the next few months could be a little treacherous.
The Ro-Mac Lumber Whole House Commodity Index is based on wholesale costs of the base components to build a 2,200 square foot wood frame home with a concrete stem wall in Central Florida. The Index includes foundation, metal, concrete, block, stucco, cement, wood framing, siding, sheathings, trusses, roofing, drywall, insulation, windows, doors, trim, garage doors, and most building hardware. It does not include décor, electrical, plumbing, mechanical, landscaping, or labor. Because the Index uses current wholesale costs, this should be a strong indicator of the direction of building prices for the next 30-45 days.
Don Magruder is the Chief Executive Officer of Ro-Mac Lumber & Supply, Inc. in Central Florida. Go to www.romaclumber.com to sign-up for the Index and other free market reports. To sign-up for this information via email, contact Rebecca Ballash at