The Cabinetry Industry Amidst Adversity & Peril
Record low interest rates, historically tight inventories, and the COVID-19 pandemic has pushed the flight of city living to the suburbs which has kindled an unprecedented and unsustainable rise in U.S. home prices. According to the Case-Shiller index, home prices soared by a record 16.6% year over year in May, and are now at 38.1% above the 2006 housing peak. Then, as we all remember, came the fall of 2007. So, what does this mean for the future of the construction industry, specifically the custom cabinetry industry?
Materials & Labor Shortages
Lumber and plywood prices continue their upward trends with many economists stating that we will see a slight retreat in 2022, but not returning to pre-pandemic levels until 2023. This is fed by the belief that over the last year and half with people being home with time and money on their hands, they wanted to upgrade their home and their living conditions. Now with people returning to work and being removed from their home more often, we should expect a level of production normalcy to start.
Producers are trying to increase their output of existing mills, but labor is a challenge for most of them. There has been a long-term trend in America from blue-collar occupations, partly a result of educators telling high school students they have to go to college. On top of that, location of mills and manufacturing shops are typically located in rural communities that have been losing population. More high schools are turning their attention back to encouraging trade schools and blue-collar opportunities as kids graduate. As a result, we should be working closely with our local school districts to encourage those views.
Supply chain challenges are fed by issues like glue shortages, caused by a storm that shut down crucial petrochemical plants in Texas, the growing challenges of finding truck drivers, and the challenges of getting supplies through customs. Other than the plants reopening, these challenges do not appear to be reducing any time soon.
The biggest challenge to every industry right now is labor shortage and escalating wages. How many businesses do you drive by on your way home from work and see a “Help Wanted” sign in their front window or on their property?
Looking to the Future
Finding ways to keep our industry exciting and relevant will be critical as we look to attract future employees and leaders to our industry. As schools reopen fully and enhanced unemployment benefits from the government come to an end, the labor shortage should start to ease.
We continue to believe that we have weathered the worst of COVID-19 (knock on wood), that the labor pool will continue to grow, that the supply chain is staring to normalize, that lumber and plywood costs will soon start to level off, and that the future of our industry can be bright if we continue to educate and encourage the next generation of “Dust eaters”.
If you’d like to learn more about our products and services, contact us today!