Tuesday, March 30, 2021

Construction crash imminent.

I was at the lumber store a few weeks ago and noticed the wood section was looking uncharacteristically rough for Home Depo. It was super thin and heavily picked over. Then it occurred to me that if there is no wood, people don't have jobs. It freaked me out enough that I walked the whole store trying to spot a pattern. I would have thought maybe this store hadn't been stocked recently and maybe this was no big deal..... if it weren't for all those stories I've been reading about shortages from literally all over the world.

The shortages have been talked about a lot over the past months, but when you start seeing large gaps at Home Depo, the end is pretty near. They have one of the deepest supply chains on the planet. 

Since then I've been trying to figure out the real reason we have a shortage of wood. There are a lot of theories, but so far most of them don't make that much sense to me. They range from when Trump put the 25% tariffs on wood from Canada it decimated their milling industry which seems plausible. Apparently this put a lot of mills out of business.  Which I'm not sure I have a lot of sympathy for because Canada put our mills out of business. Which is why we can't recover from this quickly. Those tariffs were designed to help bring back domestic production.

People go on to speculate that those tariffs caused a cosy relationship between China and Russia because wood is now a global commodity. I am not sure exactly how this makes a difference to us but.....

Others speculate about the bark beetles. 

But the craziest theory I heard yesterday is that Mendocino is holding back supply to make the price go up. I have included a handy chart of the lumber futures at the bottom of this post, and you tell me if you think that's plausible. Prices are literally at a 40 year high. Why woUld you not make money hand over fist now, for the ~chance~ at a higher price tomorrow. More likely the price will collapse and you get nothing.

Yet another theory is that we are in a building boom. Which also seems not quite the reason either. I have included housing starts at the very bottom and we have just returned to the midline.

All I know is that while our country is seizing up, Biden is out fighting social justice. Career politicians don't understand supply chains, and I'm looking forward to this next chapter. People deserve what they voted for.

Even if there was wood, half the hammers are sold out.

This has gotten worse since last week not better.

Paint supply looks thin, but it's probably a Texas problem because of the chemical plants shutting down last month. But all over the store, the top shelves are starting to look SUPER thin. Normally Home Depo is packed to the rafters. And they are pulling product to the front of shelves to make them look fuller. I mean, it not quite Fry's electronics yet... but if they start moving shelves to make the store look less empty - things gonna get crazy.

And this ALL was from before Shippy Mcstuckface caused a traffic jam.

Hope you don't want a chainsaw.

Or a leaf blower.


This is the point Trump unleashed the firehose of money.


Historical lumber futures chart. Source.

Housing starts. Source. You have to hit the max button.


  1. I was talking to a realtor here in western WA, We were talking about the cost of building a house.
    He said lumber states were closed for the covid and lumber was not an essential industry & it's taking some time to to get caught up. He advised waiting a month of two.
    -shrug- Who knows?

  2. Well, for what its worth my HD (on teh other side of hte country) doesn't have quite the gaping holes yours does (which is interesting btw, time for me to hop on HD's internal social media and see what employees are saying). But we do have some holes, and I'm finding the holes in question interesting to watch.

    Chemicals in general are in short supply. Or the prices have gone through the roof. Or both. And I'm thinking thats at least part of the pressure treated lumber, and plywood lumber, problem you're seeing. I know its part of the lumber price increase.

    Paint of course you mentioned TX, our paint dept is watching things with trepidation, cause the weather is turning nice, which means the outdoor paints are going to start moving, and we don't have hardly any to sell.

    Power tools have weird holes across the store, again or still I'm not sure, because of how the supply chains broke and how the companies ALWAYS have tended to change things up in the spring its hard to tell whats STILL out of stock, vs what is newly out of stock.

    Pool chemicals, such as chlorine tabs, prices have gone through the roof! Is the chlorine used in pools the same base chemical as cleaning chlorine? Cause if so I'ma bet I know why THATs having issues.....

    Patio furniture: OMG, the warehouse sent us SO MUCH patio furniture, and as soon as we set the displays it all sold. Poof. If you or anyone wants patio furniture or the like you/they need to move their ass over to the store of their choice and buy it now, cause at this rate it'll be LONG gone by summer.

    My store is well stocked, FOR NOW, on outdoor patio and wall and concrete block and supplies. But I'm not holding my breath for how long that'll last. Ditto for mulch and soils. Last time I checked appliances were still fucked. Cabinets still have really weird holes. Electrical never did fill the breaker and breaker boxes holes on the shelves, and junction boxes are constantly barely there.

    Meanwhile the warehouses are just throwing everything they can at us in an effort to have SOMETHING to sell in the stores.

    FWIW though, Home Depot CAN NOT just freely move aisle racks around. Because of the weight of the products being put on the higher racks, and the heavy equipment used in the stores all the main racking is bolted into the concrete. And moving it is not a simple or fast process.

  3. I was only being somewhat sarcastic with the shelves. ;) I don't think things will get ~that~ bad. But then I never thought things would get ~this~ bad. So... who knows?

    Your comment made me laugh because I was like OMG - I've never seen that girl say so much. But it's all really helpful.

    Lowes in the city next to me doesn't have the gaps HD does, but they are also clearly trying to make less look like more. It just wasn't picture worthy yet.

    I just got the call today that my oven is in. I ordered it Nov 1st. So crazy.

  4. Capital of Texas RefugeeThursday, April 01, 2021 5:08:00 PM

    Ruth: "Patio furniture: OMG, the warehouse sent us SO MUCH patio furniture, and as soon as we set the displays it all sold ..."

    Expect some real problems getting more complex plastic stuff soon and perhaps also less complex plastic stuff later. This isn't just because of Texas or the Big Green Canal Plug, but that hasn't helped.

    There are several US and EU plastics manufacturers who have either been talking about furloughs or have already implemented them.

    You can imagine how well this goes down with an ongoing need for plastic moulding.

    Billets of aluminum and spools of PLA+ for 3D printers are on the way just in case we have to in-house build some accessories for repairs and support contracts. The results may not look as cool as what we can have made for us, but they'll get us by until we can send someone around to swap some units out for new enclosures.

    If we have the materials, we can get the work done locally, which is something that couldn't be said in 2018.

    At least there's no longer a shutdown on new contracts, so there's new growth again.

    But keep an eye on plastics, this is going to be as bad if not perhaps worse than what's been going on with lumber in the US, but plastics may be a worldwide problem.

    So yes ... PANIC NOW AND AVOID THE RUSH. :-)

    Switzerland's lumber industry is so small that it's effectively overwhelmed at over an order of magnitude by what Germany and France together dump into the country, so it's not like we're noticing anything, but we will notice things going wrong with plastics.

    Despite all of the eco-posturing bullshit, people here like their plastic bottles and consumer-grade plastic stuff.

    The WEEE bureaucrats hate us because we use lead solder, but maybe bismuth solder will eventually hit the market and work properly like the old lead stuff still does.

    Also Ruth: "Is the chlorine used in pools the same base chemical as cleaning chlorine?"

    I believe they're both sodium hypochlorite, although the pool grade stuff is much stronger, so yes, those supply chains are linked at the source even if they're otherwise separate.

    Also also Ruth: "... And I'm thinking thats at least part of the pressure treated lumber ..."

    PT lumber in the US used to be CCA, an arsenic compound, before the mid-2000s, but it's now ACQ.

    That stands for alkaline copper quaternary ammonium chloride, and it's chemically similar to the quaternary ammonium chloride salts everyone's been spraying because of Fear of a Chinese Bug.

    And now Snarkie: "... you tell me if you think that's plausible ..."

    Supply forwardation happens often enough in the oil business.

    Unless there's something to support the higher futures prices, the contango remains just a bubble.

    This is looking very, very bubbly, even if there may be several smaller bubbles to go with it that make this all seem like a single bubble when it's over.

    So what happens when all of those FHA/VA loans that are at risk finally implode because of the kick-the-can "forbearance" games?

    Will there be a flood of distressed properties going on the market at cut-rate prices that will need to be repaired with some of those expensive building materials?

    Or is it likely that the lenders will try to kick the can farther so that they're not on the hook with decaying properties as a replay of 2008?

  5. We're still not going into stores, but, looking on line, the Knoxville-area HD and Lowes both claim to have fair supplies of pressure-treated lumber.
    The prices, tho'... gah. Gotta work up a list of what I need for upcoming projects, and what really needs to be pressure-treated vs. what can reasonably be regular wood, maybe painted. Haven't looked at the current pricing on regular 2x4s yet.

    1. $6 for an 8' 2x4 at Lowes or HD (I don't recall) last week.

    2. Ugh, yeah. Wood sticks not cheap anymore, and I don't know what the quality is like these days, not that it was any good last time I was in HD or Lowe's.
      Also, I hear that the price of hardwood flooring has increased by some crazy multiple in the last year. Maybe the factories are deemed non-essential?

  6. Well, its a subject I've been watching on for a while, since I'm the one on the sales floor having to explain to the average idiot WHY I don't have X product for the umpteenth week in a row.....

    FWIW, my store just got TWO deliveries of PT lumber in two days, plus we were fully stocked before that. I'm not sure if they're overstocking us on PT because of concerns for the supply chain, or if they're just continuing their "throw it all at the stores because its all going to break again!!!" ordering system that they've been on for hte last year. But the variation around the country is interesting to watch.

    Refugee, yes, I figure plastics is right up there with the rest of it. If only because of hte chemical processes involved if nothing else.

    Cleaning chemicals is my home dept at work and I can tell you that there are STILL entire brand lines of cleaners we've not seen in a year now. And we literally got our first case of Lysol branded cleaning wipes in this last week. We've had Clorox branded ones for a month or two now, but Lysol? We got ONE case in last week. I was shocked.

  7. Oh, and our overheads are FREAKING PACKED, because of how the warehouses are throwing things at us. But we still have empty holes on the shelves because of the just shear lack of some products.