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Builders and Lumber Dealers See Shortages of Key Building Materials

Home builders and lumber dealers are reporting significant shortages of key home building materials such as lumber and wallboard, according to surveys by the National Association of Home Builders and the National Lumber and Building Material Dealers Association that were released June 19.

“Supply constraints are one of the barriers to a more robust recovery,” said NAHB Chief Economist David Crowe. “The shortages and price increases reported by both home builders and lumber dealers are particularly concerning given that the current rate of construction is still far below what would be considered normal or necessary to meet underlying demand.”

Among builders, the highest incidence of shortages was for oriented strand board, with 22 percent of builders reporting shortages, followed by wallboard (20 percent), framing lumber (18 percent) and plywood (18 percent). The builder results come from special questions added to the monthly survey that serves as the basis for the NAHB/Wells Fargo Housing Market Index, which is widely viewed as a key indicator of the overall strength of the home building market.

With the exception of wallboard, the lumber dealers reported greater shortages of these products than the home builders. Among lumber dealers, 27 to 28 percent reported shortages of OSB and plywood, 36 percent reported shortages of framing lumber and 12 percent reported shortages of wallboard. The dealer results come from a special survey of NLBMDA’s members, who operate single or multiple lumber yards and component plants and deal in many of the same products that NAHB members purchase.

Both the builder and lumber dealer surveys asked about shortages of 24 specific building products and materials. For most of the products, the share of builders reporting a shortage was considerably higher in May 2013 than in 2011 or 2012. The only exceptions were copper wire, vinyl siding, HVAC equipment, insulation and structural insulated panels.

“The shares of reported shortages are not as high now as they were in 2004 or 2005, but the increases since 2012 are quite significant, especially when you take the early stage of the housing recovery into account,” said Crowe. “In 2004 and 2005 the home building industry was producing more than 1.8 million new homes a year, while the current rate of new housing starts is still below 1 million.”

The reported results reflect survey data collected from NAHB builders and NLBMDA dealers during the first half of May; 383 builders and 230 dealers provided responses. For more information or a copy of the complete report covering both surveys, contact Paul Emrath at (800) 368.5242 x8449.

255 Metros Listed as Improving Housing Markets in July

A total of 255 metropolitan areas across 49 states and the District of Columbia qualified to be listed on the National Association of Home Builders/First American Improving Markets Index for July, released July 8. This is down slightly from the 263 metros that made the list in June, but is more than triple the number of metros that were on it in July 2012.

The IMI identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Six new markets were added to the list and 14 were dropped from it in July. Newcomers include the geographically diverse metros of Cumberland, Md.; Saginaw, Mich.; Farmington and Las Cruces, N.M.; Kingston, N.Y.; and Olympia, Wash.

“Despite slight ups and downs in recent IMI levels, an overwhelming majority of U.S. metros—including those located in almost every state—remain solidly on the path to recovery even as the pace of their improvement is slowed by ongoing challenges related to the availability of credit, labor, lots and certain building materials,” added NAHB Chief Economist David Crowe. “Based on recent trends in home prices, housing permits and employment, the outlook for a continued housing expansion remains very positive for the remainder of 2013.”

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six consecutive months following those measures’ respective troughs before being included on the improving markets list.

A list of all 255 metros currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in July, is available at

Builder Confidence Rises Six Points in July

Builder confidence in the market for newly built, single-family homes rose six points to 57 on the National Association of Home Builders/Wells Fargo Housing Market Index for July, released July 16. This is the index’s third consecutive monthly gain and its strongest reading since January 2006.

“Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten,” noted NAHB Chief Economist David Crowe. “Meanwhile, as the infrastructure that supplies home building returns, some previously skyrocketing building material costs have begun to soften.”

Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components posted gains in July. The component gauging current sales conditions rose five points to 60—its highest level since early 2006. Meanwhile, the component gauging sales expectations in the next six months gained seven points to 67 and the component gauging traffic of prospective buyers rose five points to 45—marking the strongest readings for each since late 2005.

All four regions also posted gains in their HMI scores’ three-month moving averages. The Northeast showed a four-point gain to 40 while the Midwest reported an eight-point gain to 54, the South posted a five-point gain to 50, and the West measured a three-point gain to 51.
Multifamily Dip Drives Housing Starts Lower in June
Nationwide housing starts declined 9.9 percent to a seasonally adjusted annual rate of 836,000 units in June as construction of multifamily buildings slowed following recent months of strong activity in that sector, according to figures released July 17 from HUD and the U.S. Census Bureau. Meanwhile, the pace of single-family production held fairly even, with a decline of less than one percentage point.

“The large dip in multifamily production in June follows a boost of activity in May, and is consistent with the volatility that has come to characterize that sector as well as the uneven pace of the housing recovery,” noted NAHB Chief Economist David Crowe. “That said, the fact that single-family starts and permits both rose in three out of four regions in June is a positive sign that’s in keeping with our forecast as well as recent surveys in which single-family builders have registered an increasingly positive outlook.”

The annualized rate of multifamily production declined 26.2 percent to 245,000 units in June after a 28.2 percent gain in the previous month. Meanwhile, single-family construction slipped by a marginal 0.8 percent to a 591,000-unit pace. Regionally, combined starts activity declined 12.1 percent in the Northeast, 7.4 percent in the Midwest, 12 percent in the South and 5.4 percent in the West in June.

Building permits, which are an indicator of future building activity, declined 7.5 percent to 911,000 units in June. This was due entirely to a pullback in the multifamily sector, where permits fell 21.4 percent to 287,000 units. Single-family permits registered a marginal 0.6 percent gain to 624,000 units—the best pace in five years.

Regionally, permit issuance was down 4.6 percent in the Midwest, 11.2 percent in the South and 7.2 percent in the West, but rose 5.9 percent in the Northeast in June.

FMI Releases Q2-2013 Construction Outlook Report

FMI released its Q2–2013 Construction Outlook on July 8. The strength of individual markets is shifting, reducing annual construction-put-in-place predictions to $913 billion, a 7 percent growth from 2012. This is down nearly $6 billion from the $918,897 million, 8 percent growth estimated in the Q1’s Outlook. However, FMI does expect growth to return to 8 percent growth in 2014 with annual CPIP reaching $989 billion.

The major markets pertinent to readers of AWCI’s Construction Dimensions that have been adjusted downward with lower expected growth are as follows:

Residential Construction (–1.8 percent). FMI continues to forecast a 23 percent increase in construction put in place for single-family housing. However, multifamily housing has dropped from a strong increase of 42 percent in 2012 to a current 31 percent increase for 2013.

Commercial Construction (–0.8 percent). The current forecast calls for about a 1 percent drop in commercial construction from the Q1 forecast. However, this still represents a modest increase of 6 percent, to $49.8 billion for 2013. One of the contributing factors is that sales for retail and food service businesses is slower than initially anticipated.

Healthcare (–3.15 percent). Contributing factors for the decrease include hospital beds per 1,000 people trending downward and shorter patient stays.

Amusement and Recreation (–2.0 percent). Given the belt-tightening attitude across the country right now, it will likely be much more difficult to get funding from taxes and municipalities to build new stadiums in the near future.

While there is no singular reason for the drop in these markets—each is evaluated on its own criteria—there are a few economic concerns that touch all of them: the decline in public construction, expectations of more cuts as the sequestration continues, tight lending criteria and consumers being cautious about increasing their debt load.

This economic climate will keep the heat on A/E/C industry competition, especially if companies that make their livelihood in government construction start looking for work in the already competitive private sectors, according to the report.

SFIA Introduces Educational Programs

The Steel Framing Industry Association has launched The Professional Development Series of webinars and educational programs to help members and others stay on top of the issues affecting the cold-formed steel industry.

Course topics include a range of technical, sales/marketing, and management issues, and target varying levels of experience to serve everyone from those just learning about cold-formed steel to seasoned managers who want to increase business planning effectiveness. All courses are free for SFIA members.

“The SFIA recognizes that education is one of the key tools that will drive greater recognition of the many superior qualities and design advantages that cold-formed steel offers,” said Larry Williams, executive director, Steel Framing Industry Association. “SFIA has created courses—taught by leading industry experts—that are geared to inform and educate a widest possible range of professionals to ensure that cold-formed steel becomes the logical and preferred material of choice in mid-rise construction.”

Upcoming courses, which begin at 2 p.m. EDT and last one hour, include the following:

SFIA102: Cold-Formed Steel and Mid-Rise Construction. This program will explore the capacity of cold-formed steel structures to meet the requirements for mid-rise construction, investigate building code requirements for cold-formed steel assemblies, learn basic detailing techniques for designing assemblies and examine actual examples of mid-rise structures using cold-formed steel. (Aug. 6)

SFIA103: Cold-Formed Steel and Sustainability. The course illustrates how cold-formed steel framing provides a highly sustainable design solution, and will trace the embodied energy of cold-formed steel framing from raw material to ending of service life. It will also reveal how the industry has effectively reduced its carbon footprint through technology advances and process change. Special emphasis will be made to underscore cold-formed steel’s recycled content, and how it has become more of a regional material. (Aug. 27)

Understanding Design and Construction with Wood Framing. Efforts to expand the use of wood in mid-rise construction rarely provide helpful information on the material properties that can complicate design and construction in the non-residential market. This factual, straightforward session provides members with a better understanding of some of these factors, and the impact on construction times and costs. The session also reviews the recent re-grading of the mechanical properties of Southern Pine that translates into reductions to strength and allowable spans for one of the most commonly used types of framing lumber. (Sept. 26)

Registration for the SFIA Professional Development Series is available at
Continuing Ed Course Offers Strategies for Maximizing Acoustics in the


A new online training course on office acoustics, now available from CertainTeed Ceilings, provides architects and designers the latest science on how sound affects the way people work and offers strategies for creating optimal interior environments.

The free course, “Acoustic Ceilings for the Modern Office,” explains Ceiling Attenuation Class, Sound Transmission Class, and Articulation Class, which are key measurements for designing acoustically efficient spaces in private and open offices. It also explores the role of acoustics in LEED certification and discusses academic research on office environments.

The program is registered with the American Institute of Architects Continuing Education System, as well as the Construction Specifications Institute Construction Education Network. It has also been approved by the U.S. Green Building Council LEED® professional credentialing program.

CertainTeed offers more than 35 free online courses for professionals that can be used to meet all standards of national and local continuing education learning units. For more information, visit

USGBC to Offer Free LEED Certification to Groundbreaking Projects in New Markets

In an effort to accelerate sustainable development around the world, the U.S. Green Building Council , creators of the LEED® green building program, announced June 5 a new campaign offering free LEED certification to the first projects to certify in the 112 countries where LEED has yet to take root.

Coined “LEED Earth,” this campaign aims to bring LEED certification and thereby better-performing buildings into new markets. LEED is a global approach to more efficient, environmentally-sound buildings and is universally adaptable to address issues such as energy and potable water use, environmental toxins and human health concerns related to indoor environments. All building types are welcome to participate across the suite of LEED rating systems, including new construction, commercial interiors, existing buildings, core and shell structures, new homes and neighborhood developments.

To participate in the program and register a project, contact visit for the campaign’s rules and regulations. Share your involvement in the campaign or follow updates on Twitter with hashtag #LEEDEarth.

People in the News

Phillips Manufacturing Co. has promoted David Sweet to outside sales representative and appointed Carol Reed as inside sales representative.

Sweet has been with Phillips as a sales representative for more than three years. Reed comes to Phillips with more than 20 years of sales experience in a variety of industries.

Sto Corp. has announced five new team members as part of its new strategic plan to enter into new markets with the expertise of some key team members.

Brian Chang – Product Manager, EIFS/Stucco. Chang is responsible for managing the growth of Sto’s EIFS and stucco product lines to include profitability, market segmentation, positioning and new product development.

Rankin Jays – Product Manager, Coatings. Jays joined the company this spring to oversee the coatings product line, introducing new products to new markets, including architectural coatings. His experience with coatings goes back nearly 30 years, starting as a paint maker while in college.

John Chamberlin – Product Manager, StoGuard®. Chamberlin has been promoted in the company and is now managing Sto’s air and moisture barrier and entering new markets with the product line, including residential.

Tyson Kindstrom – Territory Manager, East Region. Kindstrom, new to this position, has been in the construction industry for more than 20 years and has worked with Sto Corp. since 2004. Prior to 2004, he worked as a project manager for a commercial subcontractor overseeing the EIFS and plaster division. Past memberships and active participation include CSI, ICRI, SSPC, CACM and BEC Chicago.

Valerie Mayer – Manager, Branding and Communications. Mayer joined the company in the summer of 2012 to oversee all brand initiatives and multi-channel marketing campaigns.

Dri-Eaz Products has promoted Jim Hassi to sales manager for the United States and Canada.

Hassi joined Dri-Eaz as an account manager in October and was responsible for the western U.S. and Canada regions. In his new position, he will supervise all Dri-Eaz sales operations in North America. He is based in the company’s Burlington, Wash., office.

Parex USA, Inc. has promoted Buck Buchanan to senior vice president of marketing and supply chain management and added Steve Heaton as new vice president, façade sales.

Buchanan has been with Parex USA since 1996. In his new role he will oversee a variety of the support functions for the company. These activities will include marketing, technical services, research and development, logistics, customer service, purchasing and international business. He will also continue to be part of the company’s management team.

With the promotion of Buchanan, Parex USA has added Heaton as vice president, façade sales. Heaton’s experience includes a strong sales management background that spans 15 years in various sales management positions. He will coordinate all of Parex façade sales and specification activities.


The American Iron and Steel Institute has launched a new component of their website that will make it easier for individuals to view the site on their mobile devices. The new “mobile optimized website” is a companion to the group of websites representing AISI, the Steel Market Development Institute and the Steel Recycling Institute, which are business units of AISI. The mobile optimized site offers current news and information in a format compatible with all handheld devices. Users accessing the site via mobile handheld device will automatically be redirected to the optimized version of the website.

USG Corporation has launched its USG Ceilings Mobile App, an iOS application that creates a simple, visually rich way to experience the products offered by USG Ceilings. More than just a digital version of the product catalog, the app aims to educate the design and contractor community about the breadth and depth of the USG Ceilings portfolio.

The application is available in the iTunes store and is compatible with the iPad and iPad mini.

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