Wood Components & Dimension Stock: WCMA OutlookWood industry representatives from various industry associations were queried on the climate of their wood products market, including expectations for 2013 sales. Below are some additional comments by Steve Lawser, former executive director of the Wood Component Manufacturers Association.

Wood & Wood Products: Overall, what are your members’ sales expectations for 2013 and how do they compare to 2012 figures?

Steve Lawser: Based on the preliminary results of our 2013 Market Study, most WCMA members are expecting an increase of around 5% in component sales for 2013. 2012 started out fairly strong but ended with a fizzle. However, most members feel better about 2013 as we are getting serious about solving our housing, credit, and debt issues. They have fewer competitors now so they feel there will be less suppliers to meet any increases in demand.

W&WP: What will be the biggest challenges to your members and your industry in 2013? What are the biggest opportunities?

Lawser: The major challenges are the uncertainties of our economy and our government’s inability to solve our growing budget and trade deficits. WCMA members are reluctant to expand their workforces and they are often unable to find and keep qualified, skilled employees. It has not been possible to pass along increased costs of doing business in the form of higher prices so margins remain slim or non-existent.

Imports of finished wood products and wood components are continuing to take more market share from our domestic manufacturers. However, increased labor and other costs of doing business in China and other developing countries such as higher energy, transportation, and shipping costs have made transoceanic shipments more expensive which have narrowed their competitive advantage.

W&WP: Which market segments offer the most growth opportunities for component manufacturers and why? (i.e., cabinet industry or building products?)

Lawser: With expectation for improving housing markets in 2013, building products should be a strong sector going forward. Remodeling has an especially positive outlook as people upgrade their homes with higher quality features that will generate increased demand for hardwood mouldings & millwork, flooring, cabinetry, staircases, etc. The recovery of the housing, construction, and remodeling markets remains the key to growth in the woodworking industry.

W&WP: What current or pending legislation is having, or will have, the greatest impact on the North American components and dimension industry and why?

Lawser: Increasing government regulations are of concern especially the impact of the Affordable Healthcare Act referred to as “ObamaCare”. According to the Act, there are limits to what employees can contribute which means employers will be forced to pay more. Rising healthcare costs and insurance have become the number one concern for most woodworkers.

W&WP: Any additional comments and/or observations about the wood components industry or the woodworking marketplace in general? 

Lawser: With the loss of manufacturing capacity, the woodworking industry has experienced in the last few years, those companies remaining should be well-positioned to take advantage of any upswings in demand in 2013 and going forward. These companies are true survivors and have made the necessary adjustments to adapt to changing market conditions while becoming more efficient and cost competitive.

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