The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Building materials suppliers yesterday urged Bahamians not to panic over the 30 percent increase in lumber prices since the start of the COVID-19 pandemic.

Gary Burrows, Tops Lumber and Plumbing’s general manager, told Tribune Business that while prices are still rising it is not occurring at the alarming rate many people think.

He said: “Roofing plywood went from about an average of $30 to about $40 since the pandemic started. Apparently from what we understand it is a supply and demand issue on the market right now. That’s what’s creating the surge in prices.”

Building suppliers have been warning there will be a steady increase in prices, especially lumber prices, due to Americans focusing on home improvements amid COVID-19 lockdowns and restrictions. On the supply side, lumber mills and saw mills have been equally affected by these measures which have created worker shortages and output bottlenecks.

Raymond Jones, managing director of Blue Marlin Holdings, the owner of Lil Giant Discount Lumber & Building Supplies, said: “The suppliers that we’re talking to are saying that because there’s some issues in the US with one of the big mills, as well as the increasing opening of the US economy, it’s basically the wholesalers and the mills that are driving the prices up to make up for the money they lost when everything shut down.

“They are going by supply and demand. When they were shut down, the timber mills were just sitting there; they weren’t cutting lumber or processing wood, so they had to increase their costs. They are not gouging per se, but they might be taking some profit to help defray some of the losses they took last year.

“There’s also some union issues in some of the US and Canadian ports. They have challenges with some people trying to renegotiate benefits and salaries for the time they lost when basically the world economy came almost a screeching halt,” Mr Jones continued.

“So you have a number of factors with supply and demand, with equipment repositioning, with firms now trying to get equipment in right places compared to when they came to a halt. Equipment is stuck in different places, and some of the shippers and other people didn’t want to move them at their cost until the business started to move. Now, as they get orders, they can move very quickly equipment to help ship goods into the country.”

Mr Jones also warned about an increase in freight costs coming out of the US and China. “We’ve seen the same thing in ocean freight from China into this part of the world; into the US and the Caribbean market,” he added.

“Freight rates in one month have gone up 100 percent. So I would say there’s probably some profit taking, but more than likely people are trying to recover losses or lost earnings from the start of the pandemic.”

Mr Burrows said he was unable to say when the spike in prices will stop but assumes it will ease when supply becomes more readily available.

He said: “When supply gets up to demand, I think prices should level off. But business is still somewhat reasonable. It’s not terrible even though it is not what it used to be pre-COVID-19.” High unemployment was also affecting consumer spending habits.