4 Things to Watch: Payroll, Lumber & Panel Hikes, Biofuel, and What Happened To....
August 9, 2015 | 4:25 pm UTC
Four things to watch: Pay rates will be pressured upward, as more firms add benefits, base pay rises at retailers, and new White House executive orders mandate more benefits and higher pay for government contractors. Also on the watch: :
1. Employment and Benefits
The US economy added 215,000 new jobs in July, so expect more competition for workers. Also on the watch: expect more upward pressure on lumber and panel prices, driven skyward by housing's recovery, and now, with the EPA plan mandating CO2 reductions, utilities will look at burning CO2 neutral wood pellets and chips, using the same raw materials as MDF, plywood and OSB.
One of the stronger numbers was the July uptick in average weekly hours, says Gad Levanon, Managing Director, Economic Outlook & Labor Markets, The Conference Board. This contributed to a 0.5 percent growth in aggregate weekly hours, a nice boost to the purchasing power of consumers, says the www.conference-board.org. Unemployment held at 5.3% and since the labor force is barely growing at all, job growth rates will continue to rapidly lower the unemployment rate, perhaps reaching 5% by year's end. As the labor market continues to tighten, expect to see faster wage growth.
2. EPA Plans To Cut CO² Could Raise Wood Prices
Expect more upward pressure on lumber and panel prices, driven skyward by housing's recovery, and now, with the EPA plan mandating CO2 reductions, utilities will look at burning CO2 neutral wood pellets and chips, using the same raw materials as MDF, plywood and OSB. Two wood groups - AFPA and the American Wood Council - think it's a good idea to burn more wood. But expect the groups who buy wood and put it to use to take the opposite position. This trend to pricier materials was identified during LIGNA at the Homag press conference, and is a driver for adopting technology to the maximum possible in wood manufacturing plants, ala Industry 4.0.
3. Lumber and Panel Pricing Moves Upward
Hardwood Review's weekly lumber pricing supply report fluctuates, but is generally trending upward. To combat the rise in material costs, IKEA has begun acquiring forests (the most recent, in Romania, makes that country the first fully integrated market for IKEA production). An analysis shows IKEA intends to improve lumber yield dramatically to make its long term sales targets.
4. Whatever Happened To Mark Buller?
One of the cabinetry manufacturing industry's most creative executives, Mark Buller and his team helped Norcraft Cabinets weather the downturn, took it public in March 2015, then sold it all to MasterBrand Cabinets' parent Fortune Brands Home & Security. Buller surfaced in a new board role at a publicly traded hospitality company, El Pollo Loco.
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