It’s human nature to continue doing what’s working well…until it no longer works. That’s one of the great takeaways from the COVID-19 pandemic that came through at the 2021 NWFA Wood Flooring Expo in Orlando. It had been 18 months since our industry was last together in person, and meeting plans continually changed throughout that time. Canceling Expo in Milwaukee in 2020, canceling (again) in Baltimore in April 2021, and planning to accommodate for social distancing in Orlando in July, you could say we planned this meeting at least 20 times in 18 months!
One important change the NWFA implemented during the pandemic was to co-locate with the Coverings show in Orlando. The two shows came together to increase hard surface exposure to attendees who typically might not attend both events, and we learned a lot from each other in the process. We learned how you are doing things differently after the last year, and shared stories on how those changes impacted business, some short-term, others more long-term.
Labor and material shortages continue to be a concern for many. In addition to the labor gap we’ve faced for years now, the pandemic has caused additional impact. NWFA has joined with the Floor Covering Education Foundation to develop strategies to attract and educate new workers as we move forward.
Our keynote speaker, Chuck Fowke, chairman of the National Association of Home Builders (NAHB), talked to us about the challenges homebuilding is facing in all facets of material costs, raising prices per home as much as $40,000. However, Fowke noted that stability is expected as more people return to work and take vacations. In essence, now that people are out of their houses, they will lessen the amount they are spending on their homes in exchange for travel and entertainment.
Judd Johnson of Hardwood Market Report spent time with NWFA’s Board of Directors discussing his outlook on the future of the hardwood market. According to Johnson, many of the problems that led to the increase began long before the pandemic. Post-Great Recession, homebuilding, the largest market for lumber, ground to a halt. As a result, U.S. lumber demand plummeted by 50 percent, and many large sawmills went out of business. At the same time, fires and pest infestation in Canada contributed to a further decrease in the lumber supply.
When the pandemic arrived, investors took short positions on wood futures, betting that prices would decline. In anticipation of shrinking demand, sawmill operators cut back output capacity by 40 percent. But as we know now, demand for lumber didn’t go down. Pandemic-fueled shopping booms emerged. Consumers began focusing on home improvement and curtailed spending on services, travel, dining, and entertainment. Low interest rates, stimulus cash, and more time spent at home led to a boom in home remodels and new construction, increasing demand.
Today, sawmills can’t keep up. They can’t build more mills, expand existing mills, or hire fast enough due to the labor shortage. In fact, there’s a wave of consolidation to increase the capacity immediately for the acquiring companies. So, once things settle down, there will actually be fewer mills, not more.
Another challenge, wood lookalike products, continues to be combated with the NWFA’s “Real Wood. Real Life.” consumer campaign and a new partnership with the Real American Hardwood Coalition (a group of more than 20 hardwood associations that has come together to focus on educating consumers about real wood products). Watch for an exciting project from the Real American Hardwood campaign, My Hardwood Home, to launch in 2022 to get on the front-end of material selection for consumers – showing them where to buy hardwood for all the right places in the home.
Overall, while some uncertainties remain, business mostly has been thriving throughout the entire flooring industry. Our annual Industry Outlook Survey revealed that a majority of NWFA members named 2020 as their best year ever, despite volatility during the beginning of the pandemic. Proof that our industry continues to adapt to whatever comes our way. Look for more industry insights to come in our October/November issue of Hardwood Floors.
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