Housing starts in the U.S. were up 22.6 percent in July. An interesting side-note is that most American homes are built with Canadian lumber, and we have our own pressures on that supply of material, right here.
According to the August 18 edition of Market Watch, “Home sales hit a record high in July in Canada, leaving America’s northern neighbor with severe inventory constraints. As a result, housing starts in Canada have climbed to a two-and-a-half year high in July.” This has led to pressure on lumber prices. Building permit numbers in Canada are expected to increase, as well, but they are already in pace with the boom times experienced just before the pandemic.
This has created an interesting dichotomy for analysts, or can I say “trichotomy?” One side of the economy is convulsing, with businesses going down or under in travel, air, restaurants, gyms, entertainment, gambling, etc. Other “businesses” are at a standstill, but are having little fiscal effect, since the government owns them. Education, mass transit, Revenue Canada, Canada Post, etc. are doing little positive, but everybody is still happily getting paid.
Yet in our sector, business is booming, and supplies are short. At least some Home Depot in the Toronto area are out of carpet and installation supplies. A regional stone-paver and retaining-wall block manufacturer north of the GTA says it can’t get raw materials, its workforce is on a government-mandated slowdown and the company can’t meet demand.
The Canadian dollar is higher than it’s been against the U.S. greenback in years, trading over the past week above 75 cents, opening yesterday morning at 76.
This last point is especially significant, since Canadian manufacturers and distributors often have to overcome sales objections based on the cost for Canadian customers to “buy American.”
For suppliers, it appears now is a time to strike while the iron is hot. It’s a textbook case for future textbooks. Low raw materials, low inventory, high demand, strong dollar. It’s a bona fide seller’s market.
Naturally, I’d like to hear your opinion. Are things the same in your region? Shortages? Demand? Orders?
As we have pointed out before, one business that is hardest-hit is the trade show industry for all sectors. The global pandemic caused a global shutdown of basically all in-person events. This has forced a mass move toward marketers trying virtually anything virtual to make a sale.
I think this is going to be tough. “Because we can” has never been a satisfying rationale for an action, and virtual shows have already shown too many weaknesses to mention. To me, the dynamic you get when it’s one-to-one – when you can read a person’s face and shake a person’s hand are not replaceable.
One early morning in Istanbul I stood outside the Kapalıçarşı, or Grand Bazaar, just imagining. Just over my shoulder a ways was the Hagia (pronounced Aya) Sofia – the Holy See of Christianity during the Byzantine Empire. The streets around Hagia Sofia are narrow, and you can sense the millennia through your shoes. Wherever you stand behind the Cathedral, Richard the Lionhearted passed that way.
Construction on the Grand Bazaar started in 1455, shortly after the Muslim Conquest. Then-Constantinople was (and is) at the crossroads of Asian and Europe, the end of the Silk Road and the heartbeat of overland international trade. It was where cultures met to exchange goods, but also to immigrate, emigrate, import, export, exchange currencies, learn languages and create empires. As an old friend told me of today’s European shows back when I started, “If you haven’t been there, you haven’t been there.”
It is my sense that virtual meetings and virtual shows will never be a substitute for reality. It’s like an acquaintance telling me about Turkey or China from watching a National Geographic special.
While we wait and see about the shows, there is clearly opportunity in chaos. Your customers are looking for leadership and direction. Half the country wants to get busy and make stuff. The other half wants to require masks before you turn on Zoom in your own basement.
The current situation requires intelligence. Not the intelligence of follow-the-leader. Herd immunity does not equate to herd mentality. Many of your competitors are hiding, wishing, waiting to see what others are doing. Show them.
We do. We are busy. We hope you are.
As we have reported, W.I. Media has been in the process of locating a new representative for our loyal customers. That process has unfolded. We are closing our September/October issue of Wood Industry on September 8. If you would like your customers to hear what you have to say, please contact Alan Macpherson, (416) 274-6208. More about Alan directly. November/December Coverings closes next on Oct. 7. Also, the November/December issue of Wood Industry will include our annual calendar and our Readers’ Survey – two of the most-read products we provide each year.