As the United States continues to wrestle with the realities of COVID-19, WGI continues to look for creative ways to assist our clients in realizing great projects that support our communities.
Developers, brokers, and designers must incorporate new ways of thinking in a post-pandemic environment to meet the new demands with the level of comfort their clients expect. Our team has been exploring ways to engage mass timber as a pivotal material for designers moving forward.
Given the overgrowth in national forests, job creation with lumber mills and the steadily decreasing price, the timber industry is poised to be a driver emerging from quarantine. Let’s explore how the current and future pricing of this material could have an impact on the design of your next project.
The Data
The graph below depicts the closing price of lumber each trading day since the beginning of 2020. The data indicates that the closing price has hit a high of $463.00 on February 20, 2020, with an annual low of $259.80 on April 1, 2020. This represents an overall decline of 44% in a little over one month. Since the annual low on April 1, prices have steadily rebounded with an average of $341, or approximately 26% lower than the February 20 high.
The Opportunity
We recently spoke with Michael Ratliff, the Executive Director of Business Development with Texas Timber Frames, about the drop in lumber prices and whether they were affecting his current pricing for his commercial timber projects. Michael indicated that he was receiving lower bids from his suppliers and subs, allowing his commercial timber frames to compete directly with the structural steel versions of the same project.
Recently both West Fraser Timber Co LTD and Weyerhaeuser Co., two of the largest lumber companies, announced they would cut production to meet a lower market demand and ultimately stabilize prices. However, it is our opinion that this cut in production will lag the market demand slightly and may continue to keep lumber prices low for the short term. These depressed prices may be an opportunity for the right project.
Let’s Look At The Options For Your Project
Until now, mass timber has been somewhat of a buzzword in many states, with very few developers willing to be the ‘first’ despite the success of projects in states like Washington and Oregon. One of the biggest deterrents has always been cost – and now it appears that Mass Timber is now competitive with other materials like structural steel.
If you are currently pursuing a commercial project, it may be worth considering using a timber frame as a potential cost savings solution. If you would like to know more, please reach out to our Structural Engineering team for an evaluation of your project and its potential as a beautiful mass timber structure.
