The home building industry is facing emerging shortages of key building materials like lumber and wall board, according to surveys conducted by the National Association of Home Builders (NAHB) and National Lumber and Building Material Dealers Association (NLBMDA) in May.
Among builders, the highest incidence of shortages was for oriented strand board (OSB), with 22 percent of builders reporting shortages, followed by gypsum wall board (20 percent), framing lumber (18 percent) and plywood (also 18 percent). Except for wall board, the incidence of shortages for these products was higher among the lumber dealers, with 27 to 28 percent of dealers reporting shortages of OSB and plywood, and 36 percent reporting a shortage of framing lumber.
The builder and lumber dealer surveys both asked about shortages for the same list of 24 building products and materials. The top 12 (based on share of builders reporting shortages) are shown below.
For most of the 24 products, the share of builders reporting a shortage was considerably higher in May of 2013 than in 2011 or 2012. For example, the share of builders reporting a shortage of framing lumber jumped from 3 to 4 percent in 2011 and 2012 to 18 percent in May of 2013. The share had been as high as 24 percent in October of 2004, but starts at that time were over 2 million.
Although the shares of reported shortages are not as high now as they were in 2004 or 2005, the recent surges are significant when you take the early stage of the housing recovery into account. In 2004 and 2005 the home building industry was producing over 1.8 million new homes a year. Although the current rate of new housing starts is still below 1 million, supply constraints like shortages of materials, lots, and labor have emerged as barriers to a more robust recovery.
The final study, showing complete results from both surveys, is available HERE.