Hardwood Distribution Sees Positive Outlook for US Home Construction – Commodity Commentary

By Mary de Wet

Hardwoods Distribution Inc. said the outlook for the US residential construction market remains positive.

On the outlook:

HDI, which is one of North America’s largest suppliers of specialty building products, said it expects demand and selling prices for its products to remain strong for the remainder of 2021 and through. ‘in 2022, supported by the fundamentals of its end markets.

“Supply is expected to continue to be tight, which can lead to disruptions in product availability. However, the company generally expects to have continued access to supplier supply as it is often the most major customer of its major suppliers, ”said HDI.

“In terms of freight availability, global shipping routes and equipment have been disrupted, resulting in supply constraints in several sectors. HDI believes it is well positioned as a major importer, which allows it to profitably pursue multiple freight options.

“Additionally, the company maintains dedicated internal resources that handle day-to-day logistics and its strong balance sheet enables it to secure creative freight products and options in advance.

“To date, HDI has not experienced significant negative effects from global freight challenges, demonstrating the resilience of the business. “

“Leading indicators for the US residential construction market remain very positive. Housing starts have lagged significantly behind population growth over the past decade, resulting in pent-up demand for housing.

“Millennials make up the largest segment of the population, and as they enter the home buying phase of their lives, they are expected to drive further housing demand. Record mortgage rates and a trend, resulting from the pandemic, of population displacement from urban areas to peri-urban markets are also contributing to a sharp increase in permits and housing starts.

“These trends should lead to strong multi-year demand for our products.

“The repair and renovation market is benefiting from increasing home equity and the availability of low-cost consumer capital, the advanced age of the current US housing stock, and social trends such as individuals spend more of their time and disposable income on their homes. These trends are also expected to be a major driver of multi-year demand for our products.

“The demand outlook for US trade markets is mixed, with some sectors showing strength and others recovering at a slower pace.

“Participation in the commercial market is very diverse for HDI, including construction activities in healthcare, education, public buildings, hospitality, offices, retail facilities and recreational vehicles. The company expects some of these commercial end markets to perform better than others, with its participation reducing the impact of dynamics in a geography or end market. “

Write to Mary de Wet at [email protected]

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