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Expect Supply Chain Woes to Last Well into 2022, Execs at FBMA Event Say


Don Magruder (back to camera) of Ro-Mac Lumber questions building supply leaders at FBMA Executive Panel.

COVID and the labor shortage will keep the supply chain tangled well into 2022 amid strong demand, a scenario that inevitably will push product prices higher, six veteran construction supply leaders say.

The leaders forecast challenging times ahead as the LBM industry struggles to find a new equilibrium. Continued strength in the repair and remodeling market was expected to counter any potential slowdown in the new-home market.


The predictions were made Sept. 9 in Orlando, FL, during the annual FBMA Executive Panel session at the Gulf Atlantic Building Products Expo. Don Magruder, CEO of RoMac Building Supply, asked the questions on behalf of the Florida Building Material Alliance.

“I just read a very detailed report from Sept. 3 that said that, over the past 18 months, not one thing has improved in the global supply chain, and as of last week, every single aspect of it is worse than on April 1, 2020,” said Jon Vrabley, president of Huttig Building Products. “It is an inter-tangled mess of a variety of components, depending on which country you’re talking about. But there were two consistent things that continued to come up across the entire globe: The impact of COVID, and a lack of labor.”

While all the panelists agreed that COVID’s arrival early in 2020 triggered most of the current problems, they also said a lack of workers and cuts in production capacity since the Great Recession means construction supply challenges won’t end even when the pandemic recedes. Rick Caccavello, president of Orlando’s Central Kitchen & Bath as well as head of the Greater Orlando Builders Association, noted that the cabinet manufacturers he relies upon used to be able to run three shifts a day. Now they can barely keep one going, he said.

“It’s a true comment that we don’t have enough manufacturing capacity,” said Tom Koos, president and CEO of Primesource Brands, but he stressed that this isn’t solely a COVID phenomenon. Production issues “have been going on for three or four decades,” he said. “Does it come back? There’s a lot of debates around that, but you still need raw materials from around the world, gang, it’s a global supply chain. A sawmill is pretty vertically integrated, but you’re still buying blades and such from other places in the world. If that is an issue, it doesn’t get fixed overnight. That one takes years.”

Indeed, when asked what pressure point they’d most want to resolve, all cited a lack of labor—along with “a few windows,” added Russ Hallenbeck, Tibbetts Lumber’s vice chairman and CEO. While the starts rate is beginning to flatten out in other parts of the country, St. Petersburg-based Tibbett is seeing a housing boom in Florida the likes of which it hasn’t seen since 2005.

“And [since] 2005, I believe 40% of the manufacturing truss plants are gone,” Hallenbeck added. “So how do you go from 27,000 housing starts a year to, say, 145,000, and have 40% less truss plants? There is a manufacturing shortage in Florida, I just know it.”


Magruder directed most of his lumber-related questions to Mark Calendar, VP and COO of Great Southern Wood, and Dan Beaty, the sales director at Langdel Industries.

“I think volatility will remain, and I think we’ll see higher prices due to some impacts from COVID,” Beaty said when asked about OSB prices. “For instance, some of the chemical industry was impacted by the hurricane. You may see some shortages there.” Both he and Callender said they believed current prices are too low. “It almost has to be higher because the cost to produce has gone up,” Callender said.


One bright spot came when Beaty, Vrabley, and the others pointed out that the repair and remodeling market has kept up what in the first days of COVID was a surprising surge in business.

“The demand [for new homes] is going to be there. The supply is not going to be able to keep up,” Koos said. “So, people are going to go back into their homes and remodel. If you have more equity in your home and you can’t afford a new one, you’re going to remodel.

“A starter home can’t be $750,000,” he continued. “I don’t think you can buy a home in Dallas for less than $250,000; that price was $150,000 five years ago. The market in general, you’re going to have good demand here, but it’ll bounce around from year to year. The R&R market will keep this thing very healthy for a long time.”

Vrabley said part of Huttig’s transformation in recent years involved putting a greater emphasis on the remodeling market. “Around 2006, 90% of our revenue was driven by single-family new home production and 10% was a hodgepodge of other stuff,” he said. “Today, the repair/replace/remodel market is more than 35% of our revenue stream.”

“Compared to a year and a half ago, I’d say remodeling inquiries have gone up 30% to 35%,” Caccavello said. “ A lot of people who planned on selling their home are starting to rethink that. So they’re remodeling instead of moving. Their value is going up, because the equity is there.”

And Beaty declared: “Remodeling hasn’t gotten the attention it deserved. Driving through Charlotte, it seems like one out of every homes had a port-a-potty outside.”

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