The Global Demand for Wood Will Be Overwhelming.

Rising timber prices and shortage of supply chains have led to the lowest level of merchant confidence since August 2020. The latest National Association of Residential Builders (NAHB)/Wells Fargo Housing Market Index (HMI) shows that in June, builders's confidence in the newly built single-family detached homes market dropped by two points to 81. Despite the decline in monthly data, the index above 80 is still a strong demand signal for the lack of inventory in the property market.

(Image Source: creative, invasion and deletion)

with the gradual controllability of the new coronavirus worldwide, the global timber supply chain will become more orderly. Meanwhile, with the global economic recovery, the global demand for timber will be overwhelming.

"Higher costs and lower supply of Cork and other building materials depressed the confidence of builders in June." Chuck Fowke, chairman of NAHB, said he was a custom house builder from Tampa, Florida. The high cost makes the new House exceed the budget of some potential buyers, which slows down the strong pace of housing construction. Policy makers need to pay attention to the supply chain of timber raw materials in order to continue the economic recovery."

Robert Dietz, chief analyst of NAHB, said, "although builders have adopted a variety of business strategies including price increase clauses to deal with the scarcity of raw materials, labor and plots such as timber, however, the inevitable rise in new house prices is pushing some buyers to wait and see. "In addition, the limited supply of timber leads to insufficient valuation, making it more difficult for builders to obtain construction loans.

In May, the confidence of builders was stable, but they expressed concern about the rising cost of raw materials such as timber.

Experts believe that the soaring timber price is temporary and is the result of the impact caused by the economic reshuffle. The solution to high prices is high prices. When prices rise, suppliers are more motivated to increase production capacity and output. This dynamic will eventually lead to a drop in price. With the return of employees and the re-establishment of standard operating procedures, the operation of input producers should also become smoother with the passage of time.

During the epidemic period of the new coronavirus, some changes that have occurred are also irreversible. For example, money supply around the world has increased significantly. The government has a huge deficit. This means that some of the inflation pressures that timber suppliers are experiencing may not be temporary, and the inflation and interest rates in the next decade may not be as low as the decade before the new coronavirus epidemic.

(Article Source: Wood Kingdom, invasion and deletion)