Ripple Effect: How Wood Shortage Affects Builds Around the World
Houzz editors report on how different countries are adapting to the current unprecedented shortage of lumber
Houzz AU
29 May 2021
Covid-19 closedowns coupled with a building boom – plus bushfires and a beetle plague – have combined to dramatically limit the amount of lumber available for home construction around the world. Houzz editors in affected countries examine the origins of the problem, the ripple effect on their construction industries, and talk to professionals and homeowners on the ground to see how they are responding to this unprecedented situation.
Why is there a lumber shortage?
Against all expectations, the Covid-19 pandemic has brought about a housing boom as homeowners around the world strive to adapt their spaces to sudden changes in lifestyle, such as working from home. “[In the US] our Q2 Houzz Renovation Barometer confirms that construction professionals are experiencing record demand,” says Houzz senior economist Marine Sargsyan. Pandemic stimulus packages are also contributing to housing booms in some countries. The result has been skyrocketing demand for building materials around the world.
At the same time, the global supply of lumber, or construction timber, has been hampered by a plethora of problems. A bark-eating mountain pine beetle and several seasons of severe bushfires have decimated the supply of softwood from British Columbia, Canada, which normally supplies about a third of US lumber.
Pandemic-related operational restrictions have also reduced the amount of timber that sawmills can process. For example, while Europe currently has a surplus of timber – that is, felled logs ready for sawing into lumber – the UK Timber Trade Federation identifies COVID-related slowdowns in European mills as one factor in current UK lumber shortages.
This comes on top of a slowdown in sawmill operation in some countries, such as New Zealand and the US, on the heels of several bad business years and fears of a post-pandemic recession that never fully materialised.
Against all expectations, the Covid-19 pandemic has brought about a housing boom as homeowners around the world strive to adapt their spaces to sudden changes in lifestyle, such as working from home. “[In the US] our Q2 Houzz Renovation Barometer confirms that construction professionals are experiencing record demand,” says Houzz senior economist Marine Sargsyan. Pandemic stimulus packages are also contributing to housing booms in some countries. The result has been skyrocketing demand for building materials around the world.
At the same time, the global supply of lumber, or construction timber, has been hampered by a plethora of problems. A bark-eating mountain pine beetle and several seasons of severe bushfires have decimated the supply of softwood from British Columbia, Canada, which normally supplies about a third of US lumber.
Pandemic-related operational restrictions have also reduced the amount of timber that sawmills can process. For example, while Europe currently has a surplus of timber – that is, felled logs ready for sawing into lumber – the UK Timber Trade Federation identifies COVID-related slowdowns in European mills as one factor in current UK lumber shortages.
This comes on top of a slowdown in sawmill operation in some countries, such as New Zealand and the US, on the heels of several bad business years and fears of a post-pandemic recession that never fully materialised.
Other pandemic-related shortages and restrictions have further affected the lumber supply: for example the International Tropical Timber Organization reports a shortage of shipping containers has impacted lumber imports into Japan and China; while Brexit has made imports into the UK more complicated.
Lumber is not the only material experiencing restricted supply. Affected commodities include resources used in construction, such as steel and copper. For professionals and some homeowners, this situation has translated into staggering and ongoing price increases. The US National Association of Home Builders has calculated that the lumber shortage alone has increased the price of an average newly built home by nearly US$36,000.
Unfortunately, construction projects’ long timeframes make them particularly susceptible to volatility. “The majority of construction companies are on fixed-price contracts, which places the responsibility for fluctuating costs on the contractor and affects their overall profit or loss. As lumber price volatility persists, some pros are rethinking their business models to avoid shrinking profit margins,” says Sargsyan.
It’s instructive to see how countries around the world rely on different sources of lumber, and the ways the shortage has affected the building industry and, by extension, homeowners.
Thinking of building or renovating? Find a local builder on Houzz, browse images of their work and read reviews from previous clients
Lumber is not the only material experiencing restricted supply. Affected commodities include resources used in construction, such as steel and copper. For professionals and some homeowners, this situation has translated into staggering and ongoing price increases. The US National Association of Home Builders has calculated that the lumber shortage alone has increased the price of an average newly built home by nearly US$36,000.
Unfortunately, construction projects’ long timeframes make them particularly susceptible to volatility. “The majority of construction companies are on fixed-price contracts, which places the responsibility for fluctuating costs on the contractor and affects their overall profit or loss. As lumber price volatility persists, some pros are rethinking their business models to avoid shrinking profit margins,” says Sargsyan.
It’s instructive to see how countries around the world rely on different sources of lumber, and the ways the shortage has affected the building industry and, by extension, homeowners.
Thinking of building or renovating? Find a local builder on Houzz, browse images of their work and read reviews from previous clients
In Australia
Catastrophic bushfires burned through 18.6 million hectares, and destroyed more than 2,000 homes in Australia in 2019 and 2020. This, combined with the Federal Government’s Covid-related HomeBuilder scheme, created an unprecedented demand for renovations and new builds.
“This year Australia will [begin construction on] 30 percent more homes than last year,” says Tim Reardon, chief economist at Housing Industry Association (HIA). “Australia imports about 20 percent of its timber requirements in a typical year. The volume of timber we are now importing is 10 percent higher than this time last year.
“Global demand for timber is high and, just like in the rest of the world, it is taking time for timber suppliers to increase output.”
Catastrophic bushfires burned through 18.6 million hectares, and destroyed more than 2,000 homes in Australia in 2019 and 2020. This, combined with the Federal Government’s Covid-related HomeBuilder scheme, created an unprecedented demand for renovations and new builds.
“This year Australia will [begin construction on] 30 percent more homes than last year,” says Tim Reardon, chief economist at Housing Industry Association (HIA). “Australia imports about 20 percent of its timber requirements in a typical year. The volume of timber we are now importing is 10 percent higher than this time last year.
“Global demand for timber is high and, just like in the rest of the world, it is taking time for timber suppliers to increase output.”
People who started builds or renovations are suffering months-long delays. The price of lumber is also up to 30 percent higher; but as most residential builds are on fixed-price contracts, increased costs are, for the most part, borne by builders.
But there is good news. The output from Australian mills is increasing. Some mills are working double shifts and new mills are being commissioned. Reardon believes that in the second half of 2021 there will be sufficient supply to meet the enormous volume of homes about to commence construction.
But there is good news. The output from Australian mills is increasing. Some mills are working double shifts and new mills are being commissioned. Reardon believes that in the second half of 2021 there will be sufficient supply to meet the enormous volume of homes about to commence construction.
In Japan
In Japan, about 80 percent of low-rise residential buildings are constructed of wood. And despite the fact that forests make up 66 percent of Japan’s total landmass, Japan relies on cheaper imported wood. With demand rising globally, Japan has been unable to secure imports for planned construction. This supply shortfall has in turn made it more difficult to secure local lumber. The shortage is so severe it’s now referred to as ‘wood shock’.
Philip Law, a homeowner in western Japan, says his home construction was delayed by three months, with a 50 percent increase in lumber costs. “Our bank loan schedule gets pushed, and if our house cannot be completed by January next year, we will need to re-apply for a loan again,” he says.
In Japan, about 80 percent of low-rise residential buildings are constructed of wood. And despite the fact that forests make up 66 percent of Japan’s total landmass, Japan relies on cheaper imported wood. With demand rising globally, Japan has been unable to secure imports for planned construction. This supply shortfall has in turn made it more difficult to secure local lumber. The shortage is so severe it’s now referred to as ‘wood shock’.
Philip Law, a homeowner in western Japan, says his home construction was delayed by three months, with a 50 percent increase in lumber costs. “Our bank loan schedule gets pushed, and if our house cannot be completed by January next year, we will need to re-apply for a loan again,” he says.
Architect Toshio Yasui says he now warns his clients about higher costs and longer construction times. “If clients are planning a building that is on the edge of their budget, I advise them that they might need to think twice,” he says.
However, many professionals hope the crisis will become an opportunity for Japan to re-energise its domestic wood supply. “I think we need to increase the percentage of domestic lumber in distribution and reduce the dependence on imports,” says architect Noriaki Seki. “Using local materials would also reduce transportation costs and carbon emissions.”
However, many professionals hope the crisis will become an opportunity for Japan to re-energise its domestic wood supply. “I think we need to increase the percentage of domestic lumber in distribution and reduce the dependence on imports,” says architect Noriaki Seki. “Using local materials would also reduce transportation costs and carbon emissions.”
The shortage has put renewed attention on those working to sustain the local supply chain. One initiative running since 2012 is Tokyo Wood by Kojima Koumuten Corporation. It brings together a network of stakeholders in the supply chain – from forestry to home design and construction – who collaborate to supply locally sourced lumber and build homes. “The homes we build still use imported wood for the horizontal material in the structure, but other than that, the pillars, foundations, flooring, ceilings, panels are all wood sourced from the mountains of Tokyo,” says Makoto Kanakubo for Tokyo Wood.
They also take potential homeowners on tours into forests so they get to know where and how their wood is sourced. “If the clients say they want to build with local wood, it will get easier to use more local wood for homebuilding in Japan.”
They also take potential homeowners on tours into forests so they get to know where and how their wood is sourced. “If the clients say they want to build with local wood, it will get easier to use more local wood for homebuilding in Japan.”
In France
The shortage, brought on by production pauses during lockdown and increased demand, affects lumber as well as raw materials such as steel, metallurgical products, polyurethane, concrete and glass. Compounding the problem, the French Environmental Regulation (RE2020) encourages individuals to use more wood in construction or renovation projects, as it corresponds to low-carbon requirements, says the French Union des Industriels et Constructeurs Bois et Biosourcés, the body that represents the wood and natural materials construction industry. Added to this is a strong enthusiasm for custom-made interior fittings in wood, plywood or MDF.
Bernadette Krasikow, at building company Sweet Home Paris, says there is now no supplier near Paris with stocks of MDF. “We can’t do the furniture on our projects,” she says. “MDF is hard to replace. You cannot replace MDF with oak veneer, for example, because it would be much more expensive.
“There is also a shortage of hinges. So even if we have the panels, we cannot install the doors. The shortage even affects paint, because some of the components come from China. I’m also seeing a shortage in plumbing products, such as copper elbows, an element without which a bathroom cannot be finished and which cannot be replaced.”
She reports a five to 10 percent spike in prices. “In addition to the increase in the prices of raw materials, there is the cost of container transport, which has quadrupled.”
The shortage, brought on by production pauses during lockdown and increased demand, affects lumber as well as raw materials such as steel, metallurgical products, polyurethane, concrete and glass. Compounding the problem, the French Environmental Regulation (RE2020) encourages individuals to use more wood in construction or renovation projects, as it corresponds to low-carbon requirements, says the French Union des Industriels et Constructeurs Bois et Biosourcés, the body that represents the wood and natural materials construction industry. Added to this is a strong enthusiasm for custom-made interior fittings in wood, plywood or MDF.
Bernadette Krasikow, at building company Sweet Home Paris, says there is now no supplier near Paris with stocks of MDF. “We can’t do the furniture on our projects,” she says. “MDF is hard to replace. You cannot replace MDF with oak veneer, for example, because it would be much more expensive.
“There is also a shortage of hinges. So even if we have the panels, we cannot install the doors. The shortage even affects paint, because some of the components come from China. I’m also seeing a shortage in plumbing products, such as copper elbows, an element without which a bathroom cannot be finished and which cannot be replaced.”
She reports a five to 10 percent spike in prices. “In addition to the increase in the prices of raw materials, there is the cost of container transport, which has quadrupled.”
The situation is so dire that the French government announced measures to help companies, including the freezing of penalties in the event of late delivery and the establishment of mediation processes to identify exploitative practices and secure supplies.
Paris-based architect Tina Merkes says the shortage means she has had to adjust her workflow, for better or worse. She tells us that on the client side, it is important to:
Merkes says the following is important for architects and professionals:
Browse more inspiring images of living areas on Houzz
Paris-based architect Tina Merkes says the shortage means she has had to adjust her workflow, for better or worse. She tells us that on the client side, it is important to:
- “Place orders at the start of a project, and not in continuous flow as we used to do before the crisis.
- “Make decisions with customers – for example the choice of tiling, taps, kitchen facades – as soon as possible. We used to have a certain margin of time for the products to be installed at the end of the work, which we no longer have.
- “Provide for a certain flexibility on the replacement of materials by other technically equivalent materials.”
Merkes says the following is important for architects and professionals:
- “Exchanging with fellow architects on material alternatives; learning more about the choice of materials; and finding plan Bs. It’s rewarding!
- “Ordering French products to have better product tracking. It is also much more environmentally friendly to operate locally.
- “Finding recycled/reused materials, which is both an economical and ecological solution.
- “Planning for longer deadlines.
- “Investing in alternative materials. On a current project we are looking for doors, which are very difficult to find at the moment. The company looked at various stores in Ile de France [the region surrounding Paris] and finally bought several doors from the same supplier in different stores. This means a lot of time spent by companies, which is not billed back to the customer.”
Browse more inspiring images of living areas on Houzz
In Germany
Carpenter Jörn Brenscheidt of Hokon says Germany is also suffering from lumber shortfalls, but he also points to the bigger problem of a shortage of coatings such as lacquers and hard wax oils because of production shortfalls in Europe and Asia. “[One example is that] paint buckets are made up of several components, each manufactured in a different country. If parts are missing there, the bucket for the paint cannot be manufactured and the paint subsequently cannot be supplied,” he says.
Carpenter Jörn Brenscheidt of Hokon says Germany is also suffering from lumber shortfalls, but he also points to the bigger problem of a shortage of coatings such as lacquers and hard wax oils because of production shortfalls in Europe and Asia. “[One example is that] paint buckets are made up of several components, each manufactured in a different country. If parts are missing there, the bucket for the paint cannot be manufactured and the paint subsequently cannot be supplied,” he says.
Adi Brandl, head of planning and project management at Lebensraum Holz in Bavaria, Germany, says delivery times on insulation materials are currently just as long as for wood: 10 weeks. “Steel is available, but expensive. For plastics, we are already being warned of shortages and increases in price.”
Brenscheidt points to the importance of professional networks to secure supply. “Where we knew there were shortages of paint, glue, oil, and screws, we made orders and payments in advance. Fortunately, we have private connections to a paint supplier. He lets us know when there are favourable offers and then places an order for us. We also have good contacts with a large sawmill, so networks come in handy in these times,” he says.
And while Brenscheidt points to globalisation as the root cause of the shortages, he also anticipates that prices will be settled by the market in the future. “In this sense, it means that the shortage of materials will ease again. Because when prices rise, demand also falls.”
And while Brenscheidt points to globalisation as the root cause of the shortages, he also anticipates that prices will be settled by the market in the future. “In this sense, it means that the shortage of materials will ease again. Because when prices rise, demand also falls.”
In Italy
Paolo Fantoni, the vice president of FederlegnoArredo, the association that represents companies in the timber furniture sector, says the whole wood-production chain in Italy has been shaken. “It started last year and it hasn’t stopped. This is the reason behind a something like 20 to 30 percent increase in wood prices,” says Fantoni.
Angelo Marchetti, the president of Assolegno, which represents about 500 Italian primary wood-processing and construction companies within the FederlegnoArredo, says it may provide the impetus for much-needed change. “In the last 70 years the amount of wooded land in Italy has increased 60 to 70 percent. Today it is 38 percent of the national territory. But wood is only 0.08 percent of the national economy,” says Marchetti.
Paolo Fantoni, the vice president of FederlegnoArredo, the association that represents companies in the timber furniture sector, says the whole wood-production chain in Italy has been shaken. “It started last year and it hasn’t stopped. This is the reason behind a something like 20 to 30 percent increase in wood prices,” says Fantoni.
Angelo Marchetti, the president of Assolegno, which represents about 500 Italian primary wood-processing and construction companies within the FederlegnoArredo, says it may provide the impetus for much-needed change. “In the last 70 years the amount of wooded land in Italy has increased 60 to 70 percent. Today it is 38 percent of the national territory. But wood is only 0.08 percent of the national economy,” says Marchetti.
Italy currently imports 80 precent of the lumber it uses for furniture and construction. “The proposal is to start using local wood, as a way to have cheaper wood, with a new programmed management of our territory,” he says. “We have to go back to our wood and consider it as a starting point for a new economy, avoiding the importation of so much wood from other countries.”
In the US
Building and renovation is booming at the same time as the cost of products and materials has escalated and deliveries have been delayed. Labour shortages and longer wait times for subcontractors are creating a challenge for people mid-build.
To keep their projects on track, some homeowners have found promising alternatives. “We wanted to build a deck between our sunroom and screened porch this spring. But when the price of lumber skyrocketed we opted to add gravel to the area as a stopgap measure,” says homeowner Jo Adang in Pennsylvania, USA. “It turns out we like the gravel option so much we may even keep it this way! It is definitely low-maintenance.”
US-based Lance Granger says he was about to start a new home build on a property north of Battle Ground, Washington, but because of lumber prices he decided to mill trees from his land into dimensional lumber for the build. “[It is] unfortunate that our supply chains have been damaged so much recently, but this is looking like it will turn into a great experience for us,” he says.
Building and renovation is booming at the same time as the cost of products and materials has escalated and deliveries have been delayed. Labour shortages and longer wait times for subcontractors are creating a challenge for people mid-build.
To keep their projects on track, some homeowners have found promising alternatives. “We wanted to build a deck between our sunroom and screened porch this spring. But when the price of lumber skyrocketed we opted to add gravel to the area as a stopgap measure,” says homeowner Jo Adang in Pennsylvania, USA. “It turns out we like the gravel option so much we may even keep it this way! It is definitely low-maintenance.”
US-based Lance Granger says he was about to start a new home build on a property north of Battle Ground, Washington, but because of lumber prices he decided to mill trees from his land into dimensional lumber for the build. “[It is] unfortunate that our supply chains have been damaged so much recently, but this is looking like it will turn into a great experience for us,” he says.
Also in the US, Joseph Graves, the owner of Graves Construction, says they have had to redesign their contracts and action plans to accommodate rising material costs as well as spending extra time managing the process for contract bidding. “Sometimes we offer clients alternative options, with pricing comparisons, when there’s an affordable solution to high-priced material. We have definitely put a squeeze on every process to minimise losses, and raise homeowners’ awareness,” he says.
Al Pante, project manager for Decorem Home Improvement in Virginia, USA, says they have changed to labour-only contracts now prices have risen so dramatically. “We still break down estimated costs for the homeowner in advance so they can make an informed decision.”
Your turn
Has the current lumber shortage affected your build or renovation? Tell us about it in the Comments below, share this story with your building team and join the conversation.
More
Tell us about your experiences with the timber shortage in the discussion below and read homeowners’ and builders’ perspectives here with Houzz Call: Are You Having Trouble Sourcing Wood for Your Build?
Al Pante, project manager for Decorem Home Improvement in Virginia, USA, says they have changed to labour-only contracts now prices have risen so dramatically. “We still break down estimated costs for the homeowner in advance so they can make an informed decision.”
Your turn
Has the current lumber shortage affected your build or renovation? Tell us about it in the Comments below, share this story with your building team and join the conversation.
More
Tell us about your experiences with the timber shortage in the discussion below and read homeowners’ and builders’ perspectives here with Houzz Call: Are You Having Trouble Sourcing Wood for Your Build?
What are you working on?
Related Stories
Renovation Guides
What Key Measurements & Room Dimensions Should I Know for a Reno?
Read practical information about key room measurements and minimum clearances for fittings and fixtures in every room
Full Story
Most Popular
5 Reasons Your Bathroom Smells Funky (and How to Fix the Problem)
A plumber reveals five reasons your bathroom might smell like sewage or emanate a musty odour
Full Story
Most Popular
How to Control the Cost of Your Renovation, Room by Room
Where to save, where to spend (and all the tricks in between) for keeping the cost of your renovation on track
Full Story
Picture Perfect
21 Beautiful Ways With Bricks, Indoors and Out
Our coffee-break escape offers you five minutes' worth of images to inspire and delight. Jump right in...
Full Story
Picture Perfect
25 Stylish Ways to Number Your Home
Our coffee-break escape offers you five minutes' worth of images to inspire and delight. Jump right in...
Full Story
Picture Perfect
19 Ways to Introduce Slats in Your Renovation or Build
Our coffee-break escape offers you five minutes' worth of images to inspire and delight. Jump right in...
Full Story
Picture Perfect
20 Contemporary Conversation Pits to Sink Into
Our coffee-break escape offers you five minutes' worth of images to inspire and delight. Jump right in...
Full Story
Most Popular
Bag of Tricks: A Guide to Bagging Brick Walls
Bagging brick walls is an affordable alternative to render, allowing texture and a hint of history to show through
Full Story
Picture Perfect
19 Great Examples of Matching Joinery and Wall Colour
Our coffee-break escape offers you five minutes' worth of images to inspire and delight. Jump right in...
Full Story
Trade Shows
9 New Looks for Tiles You Need to Know From Cersaie 2022
Muted tones, tactile surfaces, smaller tile formats and bigger innovations are trending in ceramics and bathrooms
Full Story
Wow, the last 4 years, no shortages. This year here they are. Buch of bull. This is not about Covid but about control.
There’s little mention of environmental issues Re sustainable timber and felling from sustainable plantations only. In many countries , especially Australia we have lost so much of our forests through the recent catastrophic bushfires that felling from the remaining forests is hard to justify. Habitat for our native wildlife has also been decimated by the fires such that species are being newly categorised as endangered such as the koala bear. Alternative building materials need to be researched that have a lesser impact on our climate changed environment. Perhaps Houzz could research and write an article on that topic to provide some balance on this issue.
@MargaretBarkley, You're right, this article is specifically about the timber shortage and how it effects pros and homeowners. We are planning a story on new, sustainable building materials in the coming weeks. We also publish many stories on sustainable building each month as we support and promote sustainability; simply type sustainable into the search term bar and you can see what we have previously published. Alternatively, navigate to the dropdown menu under 'stories' and on the left-hand side select 'eco living', under this is a tab called 'sustainable ideas'. There are many stories there too.