Lumber can be used for several purposes. You can use it for firewood, building shelves, building houses, building dog houses, making paper, etc. Lumber is used in both the home and industrial sectors. If the price of lumber rose or fell, the sectors would be affected. How exactly would they be affected? Here are 20 ways lumber prices affect us.
1. It Will Lead to House Shortages
Not all homeowners can afford to build a house when lumber prices increase. Since they cannot afford to buy timber, they will not build any homes. As a result, there will be a decrease in the number of houses left to buy.
2. It Affects People in the Music Industry
Lumber is used to manufacture guitars, violins, drums, drumsticks, woodwinds, etc. When the price of lumber increases, so will the instruments. Musicians will therefore use a lot of money to buy the instruments. They cannot afford to leave them behind since they need them to earn a living.
3. Families Suffer Due to Unemployment
We have seen how the price of lumber causes some workers to lose their jobs, e.g., contractors. A contractor does not only suffer when they lose their jobs. Their family suffers, especially if the contractor was a breadwinner. If the breadwinner does not get a job soon, the family will starve and get evicted from their homes due to a lack of rent payments. Such problems are likely to affect the direction of marriages.
4. Contractors Will Lose Their Jobs
A contractor’s duty is to supervise the building and remodeling of a project. Building projects heavily rely on timber. For a building project to begin, e.g., housing, the homeowner must procure some lumber. If the price of lumber is too high for the homeowner, they will not purchase it. Without timber to build a house, the contractor will have no project to supervise. If many more homeowners do not buy lumber, companies will be forced to let their contractors go.
5. Most Construction Workers Will Become Idle
Some people prefer to build a house than buy one. To build a home, you need timber and construction workers. With the high price of lumber, a homeowner may be unable to procure it to build their house. As a result, they will not hire any construction workers. To employ the construction workers, they would need first to buy the timber. The homeowner may then choose to wait for the lumber prices to go down before they embark on their project. The longer the homeowner waits for the prices to fall, the longer the construction workers stay idle. This is because construction workers rely on house builders to earn an income. As a result, some workers may sink into depression due to idleness.
6. Homeowners Will Be Forced to Live in Unfavorable Neighborhoods
As noted earlier, the high price of lumber triggers the high cost of houses. A potential buyer may desire a home in a safe region but will be unable to do so due to its high price. Consequently, they will be forced to look for cheaper houses. More often than not, affordable dwellings tend to be in unfavorable environments. For instance, the buyer may end up living in a neighborhood that is full of crime, noisy, or unsanitary.
7. It Leads to Demand for Other Lumber Alternatives
A lot of people prefer to use timber for various projects. They use timber mainly because they do not think there are other wood substitutes. However, they will likely consider using other substitutes when there is a timber shortage or a high rise in its cost. With increased lumber prices, people will be forced to look for suitable replacements. Some of the lumber substitutes people use include: cork, metal, bamboo, rubber, foam board, plastic, and the list goes on. So, if more people use cork for flooring, the cork industry will flourish. But on the other hand, the lumber industry may be on the brink of collapse if its price remains high.
8. It Can Disrupt the Supply Chain
Lumber manufacturers rely on wholesalers to supply it to customers. When the price of lumber is high, wholesalers will be the first party to bear the brunt of the high cost. It is more expensive since they have to buy lumber in bulk. If they cannot buy the lumber in bulk, the lumber may not reach the customers. On the other hand, some wholesalers could buy lumber despite the high cost. However, when they sell them to the customers, they will have to increase the price of the lumber further. Sometimes, the customers may refuse to buy the highly-priced lumber, forcing the wholesalers to convince the customers to buy from them.
9. It Leads to Increased Labor Shortage
For a person to be good at woodwork, they need to attend a woodwork school. We have seen how the school’s purchasing power decreases when timber prices rise. With no wood, the school will be unable to train the students on woodwork. That means they will not learn any woodworking skills. Their lack of woodworking skills means they will be unable to work in the construction industry. With no labor available, the construction industry may decide to hire labor outside their country.
10. It Leads to Excessive Borrowing
Have you ever had a neighbor who endlessly borrows you for things? More often than not, they fail to return what they borrowed. Be prepared for that when the price of lumber goes up. Instead of buying their timber, your neighbor may decide to borrow the lumber that you stocked. At an international level, people may borrow timber from other countries. Usually, they reassure the neighboring country that they will return their lumber or pay them back. However, if the borrower defaults, that can lead to strained relationships between countries.
11. It May Lead to Uncompleted Projects
Have you ever visited a home and found a house under construction? Then, years later, you see the same homestead and find the house in the same state. But, before you conclude, they are too lazy to finish the house; the high rise of lumber may have something to do with it. Some people begin constructing their houses when the price of lumber is still affordable. Later on, when the price increases, the homeowner realizes that they will be unable to afford the timber. Some may choose to wait for the prices to come down. In most instances, the prices of commodities hardly come down. As a result, the uncompleted house stays on for several years.
12. Workforce Development is Affected
For schools to train students in woodwork, they need lumber. Woodwork is a practical course, so you cannot teach it theoretically. The high cost of lumber affects such schools since they may not be able to afford it. With no lumber to use for course instruction, the students will be unable to learn the necessary woodwork skills needed in areas such as the construction industry. Consequently, the students may leave the woodworking school for another or pursue a different career path.
13. It Forces People to Engage in Side Hustles
Despite having the minimum wage law in place, some people still get paid below the minimum wage. As a result, they will be unable to afford commodities like timber. When the price of lumber is high, the worker understands that their earnings from their job are insufficient to purchase it. As a result, the worker will work two different jobs to afford lumber.
14. High Turnovers
At some point, people may refuse to purchase any lumber priced highly. Others will be unable to afford it. Whichever the outcome, the lumber sellers will suffer greatly. Salespeople usually face immense pressure from their managers to sell the lumber. That means they have to try their hardest to sell the lumber to unsatisfied clients. If they are unable to sell, the managers usually threaten to sack them. Unable to work in such conditions, the salespeople leave and pursue other ventures. The lumbering company is then forced to replace the salespeople who leave. As a result, employee turnover ends up being expensive for the company. For instance, the company incurs costs through advertising for the job positions, training new workers, etc. In such a case, the management has to find a way to urge sellers without pressurizing or threatening them.
15. It May Lead to Crime
What happens if people want lumber and cannot afford it due to its high price? Some people will do whatever they can to acquire it illegally. For instance, excessive illegal logging is likely to occur. If uncontrolled, the area will soon experience desertification. Also, people may choose to rob drivers ferrying timber. If the drivers refuse to cooperate, they may be murdered. In extreme instances, high lumber prices can trigger riots or revolutions. It will happen when the citizens feel that the government unfairly sets the price of lumber high. By engaging in protests, the aim is to persuade the government to do something about the high cost of timber. Unfortunately, people take advantage of the protests and loot from stores. In most instances, the storekeeper had nothing to do with their grievances.
16. It Causes Starvation in Households
In some homes, people buy firewood to cook food. Typically, they do not rely on other energy sources. With the high cost of lumber, firewood will be expensive. People who are dependent on buying firewood may not afford them. Consequently, they will be unable to cook their food and risk facing starvation.
17. It Will Affect the Price of Houses
Nearly everything in a house is made from wood. Some wooden items include cupboards, floors, tables, doors, etc. With the high price of lumber, the builder has no choice but to buy it at that cost. Once they build the houses, they will be forced to sell them at higher prices. The profit is supposed to enable them to recover the money they used to buy the timber.
18. Some People Will Source Cheap Timber from Other Countries
When clients come across an expensive product or service, they go elsewhere. This is precisely what will happen if the price of lumber goes up. If many people buy lumber cheaply from neighboring countries, the economy of their country will go down. That means a lumberjack or a government agency selling timber will face stiff competition. As a result, they will have unsold timber.
19. It Affects the Activities of Nonprofit Organizations like Habitat for Humanity
Habitat for Humanity is an American organization that helps low-income people build homes. For them to build homes, they need timber. If the price of timber is high, it will affect their service delivery since they will not afford it to build houses. As a result, the homeless people who depend on the organization will be unable to get access to shelter for some time.
20. It Impacts Purchasing Power
When the price of lumber goes up, most people will not be able to afford it or its products. For instance, a school may want to buy desks for its students. However, the moment they realize the cost of desks has risen, they may not buy them due to the high price. It means the school administration may force students to share desks. Meanwhile, the business that sells desks will be affected. With people not buying their desks due to low purchasing power, the company may soon close down to low sales.
Who knew that the price of lumber had such an impact on nearly every aspect of our lives? You may not realize it, but you are currently using a wooden item as you read this article. For instance, you could be reading this article from your desk or lying on your bed while using your cellphone. Remember, if the price of the lumber went up, then the wooden items you are currently using would likely increase. In such a case, you may either figure out a way of making even more money or think of other items you could use in place of lumber.