Thunder Bay – BUSINESS – Simple economics is the higher the price, the lower the demand. Lumber prices have been dropping drastically in recent weeks, mainly because the high cost of lumber has had many people decide to postpone projects.
People planning to build decks, do home improvements, or upgrades simply decided no way when the price of an eight foot 2×4 was over $10 or $12 each.
That falling demand, where today that eight footer is now under $5 is simply the market forces in action.
They are likely to cause problems for saw mills as falling demand over coming weeks, with summer starting to wind down, could result in layoffs.
In Western Ontario, the high danger from wildfires has many operations in the woodlands slowed as well.
There could be some price static on lumber at the retail level as some retailers have fairly large inventory levels of wood purchased at higher prices.
One impact of the price of lumber could also be on the price of woodworking tools. If consumers are not building, there is not likely going to be large demand for tools for the Do-it-Youself homeowners.