By Reginald Tucker Orlando, Fla.—When the COVID-19 pandemic hit in earnest in the U.S. in March of 2020, it put the kibosh on many in-person industry conferences, including the annual NWFA Expo, which was scheduled to kick off in Milwaukee in April that year. But instead of canceling the event outright, association management put a quick plan in action to hold a virtual conference—its first.
With more than 2,700 online participants and 25 education sessions, the event was deemed a veritable success.
As the pandemic raged on for the next 16 months, it looked as if the 2021 NWFA Expo —slated to take place in what was until recently a still largely shuttered Baltimore—might also be in jeopardy of cancellation. Again, show management got creative and came up with a plan to not only move ahead with an in-person conference but also co-locate with another prominent industry trade show—Coverings 2021.
In the end, it turned out to be a stroke of genius. “I’m so glad to see real people again,” said Michael Martin, NWFA president and CEO, in his opening address to attendees here last week. “I have to tell you—I didn’t think I would ever be excited to speak publicly again because that’s really not my gig, but this is really exciting.”
Craig Dupra, NWFA chairman, shared Martin’s sentiments in his opening remarks to attendees. “I applaud our association for leading during these uncertain times. We adapted, went digital and we were able to share information and strategies to survive and, in many cases, thrive. Like the wood flooring we work with, our industry has proven that we can withstand whatever comes our way.”
With that, the NWFA Expo, now in its 35th year, kicked off amid an enthusiastic audience. It was in keeping with this year’s conference theme, “Come Together,” which summed up both the objectives and sentiments of many of those in attendance. “We wanted to be here to show our support for the industry,” Dan Natkin, vice president of hardwood and laminate, Mannington, told FCNews. “It’s also a great opportunity to meet up with distributors, builders and contractors that we haven’t seen in a long time.”
That sentiment was shared by Chris Thompson, regional sales manager with Quebec-based Boa-Franc, maker of the Mirage brand. With Canada still largely on lockdown, it was vital to get back in front of its customers in the U.S. “It’s been pretty busy today,” he said on the opening day of the expo. “I’m sure I speak for a lot of people when I say it’s good to be back.”
Across the NWFA Expo showroom floor, which featured about 160 exhibitors, the consensus was pretty much the same. At the QEP booth, for instance, traffic was virtually non-stop from opening day to late afternoon on the second and last day of the show. “We’ve been pretty swamped,” said Renee Tester, vice president of marketing, e-commerce and digital. Ditto for Indusparquet, which brought a slew of members out to the show. “The traffic has just been incredible,” said Jodie Doyle, vice president of sales and marketing. “We’re really glad that we decided to show here.”
While the NWFA expo offered vendors an opportunity to meet with customers and showcase their latest products—even though many report backlogs on both finished products and raw materials—the event also had another purpose. The conference gave attendees, which spanned across virtually all channel levels—manufacturer, distributor, contractor and retailer—the chance to come together to hash out some of the pressing issues they face. From runaway raw materials prices and delays in shipments on the water, to the ongoing labor shortage and rising inflation, the industry has its hands full.
“Every step along the transportation chain has major issues at the moment,” NWFA’s Martin said, citing logjams at the ports as well as shortages of truck drivers. But that’s not the only challenge. “Lumber prices are many times higher than a year ago. It’s the fastest rise in lumber pricing since the post-World War II housing boom. We’ve seen estimates that show the increase in lumber has added $40,000 to the average cost of a new home. How this happened is by a perfect storm of supply and demand factors. Couple that with the fact that many of our sawmills went out of business. At the same time, forest fires and pest infestation in Canada contributed to a further decrease in lumber supply.”
It’s a situation where no one company has an advantage. “These challenges are being confronted by all manufacturers throughout North America,” said Paul Rezuke, vice president of sales, U.S., at Wickham Hardwood Flooring. “The volatility regarding raw material availability, the price changes that seem to be weekly, along with the challenges to find labor are commonplace within the industry.”
The root of many of the underlying issues lies in speculative market practices. As NWFA’s Martin explained: “When the pandemic arrived, investors took short positions on futures, betting their prices would decline in anticipation that demand would slow. Sawmill operators cut backup capacity by 40%. As it turned out, the demand for lumber didn’t go down, and pandemic-fueled shock trends emerged. Consumer spending on services, travel, dining and entertainment curtailed as many people began focusing on home improvement. Low interest rates and stimulus cash led to a boom in home remodels and new construction, thereby 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. Hopefully, a return to normal will be on the horizon.”
But it wasn’t all bad news. While uncertainties remain, many specialty retailers and, by extension hardwood flooring contractors, fared well in 2020. According to NWFA’s latest industry survey, the majority of member companies said 2020 was their best year ever despite the pandemic.
The road ahead
As the U.S. beings to turn the corner on the pandemic, the wood flooring industry is banking on a strong comeback once conditions normalize. But most agree it’s just going to take some time. “Until the labor pool gets back to being stable, it’s going to be difficult for sawmills and manufacturers to increase capacity,” NWFA’s Martin said. “And although we’re still dealing with escalating lumber prices, it’s starting to come down a little bit.”
If there’s a silver lining regarding the pandemic, it’s that COVID-19 presented manufacturers with an opportunity to restructure their business. What ultimately emerges remains to be seen. “I think there’s a lot of business models that are in flux right now,” Martin said. “We’re going to see change come out of this period, which could be good for everybody.”