Is lumber inflation coming to B.C. or is it already here? Right now there is reportedly a lumber shortage that is drastically soaring prices. Businesses in the B.C. region can already feel the pain and are already seeing rising prices, some more than 20 percent for the cost of goods.
That inflation is going to eventually trickle into other areas, with businesses raising prices for consumers and other businesses that buy their products.
Lumber shortage and inflation driving up cost of construction
There are a number of businesses that could be greatly impacted by this change and some are worried about where that inflation might lead, how bad is it going to get? Especially after all of the stimulus that was just printed.
Some say that there might be no end in sight to the inflation and that could have some dire consequences for the economy and the standard of living for millions. If we are expecting to see pre-pandemic prices then we might not ever see that again some are suggesting.
Last year when COVID-19 there were many industries impacted and lumber mills shut down for some time, that is having a huge impact on the supply even now.
It could take several weeks to fill an order that used to take a day or two to fill because it is getting harder to source materials. It is not only B.C. or Canada that is seeing those increase in lumber prices, but other areas in the U.S. are also facing the same issue. The have seen a historic rise in lumber prices and drastic shortage in supply as they do get a great deal of their supply from Canada.
The tariff on imports from Canada on that lumber has also been called out as a potential contributor to the problem along the way.
The question of whether or not lumber inflation is coming to B.C. might be already answered, businesses are seeing the pain here now. They are seeing that increase in price and that shortage of supply. We are also told that prices might increase for a number of other things from food to gas and other areas of the economy.
There are a number of factors that people are pointing to that might be contributing to the problem.
- Lumber factories closed last year for some time decreasing supply
- inflation might be increasing the price
- lack of available workforce increasing construction costs
- increase in housing demand driving shortage
- increase in DIY builders last year that bought more lumber for projects
Lumber prices climb 180%
Lumber prices have increased in some regions more than 180 percent compared to 2020 and that lumber shortage means people are going to be seeing higher housing costs as a result down the line because of the increased cost to construction companies. Unprecedented spikes in the price of lumber have already made houses thousands of dollars more costly in the U.S., about $24k more expensive on average.
It’s about $30k more for a house now because of Canadian lumber prices.
Right now for Canada there isn’t any relief in sight to that lumber shortage even though Canada is a region that has an abundance of forests. They have been seeing these high lumber prices since last summer so the discussion has been going on for several months now. Some have suggested that we might be seeing the peak of that price run now and perhaps a decline won’t be that far off if that’s the case. But it isn’t certain exactly when things might get back to normal or when we might see those prices decline to a comfortable level. According to Federal Reserve Chair Jerome Powell, the best solution for this problem they think right now is time.