June 26: Volume 32, Issue 1
By Reginald Tucker

For much of 2016 and the year before that, U.S. hardwood flooring suppliers reported more stable pricing trends compared to the 2010-14 period, which saw more volatility. This trend is based on a number of variables ranging from winter weather patterns in the top growing regions for lumber that will eventually be used for wood flooring to shifting demands for solid and engineered flooring in various markets around the country.

But there’s another factor impacting the price and supply of lumber utilized for hardwood flooring: competition from other building material sectors that utilize the same raw materials, albeit different grades and species. Topping the list are cabinetry/millwork manufacturers as well as suppliers of materials for industrial applications (i.e., railroad tiles and pallets).

A recent report from Matt Bumgardner of the U.S. Forest Service, Northern Research Station, shows production of eastern U.S. hardwood lumber is down precipitously from its lofty perch in the late 1990s, when output exceeded 12.5 billion board feet. After steep declines in 2000-01, the market leveled off between 2003 and 2006 before slipping once again from 2007-09. After hitting a low of 6.5 billion board feet in 2009, the lumber market has been steadily rising, hitting 9 billion board feet in 2015—the latest period for which statistics are available.

One of the major shifts in U.S. hardwood lumber consumption over the 1991-2015 period, the report shows, is in the ratio of “appearance-based” applications (which include hardwood, cabinetry and millwork) to “industrial-based” uses. For example, in 1991, appearance-based consumption of U.S. hardwood lumber accounted for 48% of the business while industrial applications represented 40%. Fast forward to 2015 where industrial applications now account for roughly 50% of consumption with appearance-based usage down to about 37%.

The reduction in U.S. hardwood lumber consumption has directly impacted employment in the sector. According to the Bumgardner report, there were more than 1,579 sawmills employing upwards of 23,590 people in the Appalachian region—a key growth area for U.S. hardwood products. (Armstrong Flooring reports its solid hardwood floors are made utilizing Appalachian hardwood, prized for its tighter grain and consistency.) Looking at 2015, the number of sawmills fell by more than 28% to 1,128, with employment in the sector dropping nearly 27% to 17,231 workers. Industry observers cite various reasons for the decline, including increased automation and new technologies as well as a rise in imported raw lumber and finished flooring products.