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Housing slump slams timber industry

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By Sarah Baldwin - bio | email

June 24, 2008

METCALF, GA (WALB) - New home construction has slowed drastically this year. The demand for building materials is at an all time low and lumber companies are hurting.

This lumber mill in Metcalf is the only one of Hood Industries mills that is still running on a somewhat normal schedule.

Plant manager Frank Pickle says it's the worst he's seen it, and he's been in the lumber business his whole life. "It's a very tough, tough time in the business. In fact we closed one lumber mill earlier this year in Louisiana. The sales price is so low because of the poor demand that most mills are running at a loss. The very best ones possibly break even."

Down the road, President Bryant Beadlessays the Balfour Lumber Company in Thomasville is feeling the hurt, too. Both companies blame the housing slump. "The lumber business as a whole, about 40% goes into new construction, and that construction has fallen in half, it's been cut in half."

To give you an idea how much new construction has slowed down, in 2005 there were about two million home starts. This year we probably won't see one million.

Adding to the problem, the housing bubble a couple of years ago left a lot of unsold inventory out there.

"That unsold inventory has to work itself out of the market before we get back to some degree of normality."

"Even if housing comes back, the diesel fuel has effected trucking so much that getting the goods to market it really going to be a challenge."

Now lumber companies are forced to look at other options and making different products.

"A lot of people have decided to remodel and stay where they are instead of start new construction. The remodeling business requires a different kind of lumber"

"We're hoping 2009 maybe we'll see some return to normal levels."

Some lumber companies are even debating whether to close mills and wait for the market for their product to return.

The plant manager at one lumber company told us that most lumber mills he knows of have not seen a profit in a year and a half.

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