Red Oak and White Oak Flooring Up 10%
September 20, 2012 | 7:24 pm CDT
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What a difference six months makes. In our april 2012 forecast of the flooring sector, we noted that prices and sales volumes of red oak and white oak strip flooring had just begun to improve—after retreating for the prior 18 months.

Those early weeks of recovery in late-March turned into a six-month rebound that will continue through at least year-end. Prices for unfinished 2-1/4” Sel/Btr Red and White Oak strip flooring have climbed 10% since March, while #1 Com prices are up 21% in Red Oak and 14% in White Oak. Even so, current pricing is well below five-year highs.

Improving market fundamentals, however, have set the stage for additional expansion in domestic strip flooring manufacturing and sales into 2013. While many flooring plants are operating at their single-shift capacities and remain oversold, profits are slim and most managers lack enough confidence yet in future demand to risk adding another shift.

Watch for production increases after the first of the year, however, especially if housing markets continue to tick up; jobs numbers improve; and optimism about the economy returns post-election. Rising imports will also work to limit price increases in 2013 even as market demand expands through the year.

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