NWFA Expo gets back to face-to-face interactions
Craig Dupra, president of the NWFA, shared Martin’s feelings in his opening address to the audience. “I applaud our association for leading in these uncertain times. We adapted, went digital and we were able to share information and strategies to survive and, in many cases, thrive. Just like the wood floors we work with, our industry has proven that we can withstand anything that comes our way.”
With that, the NWFA Expo, which has now been in existence for 35 years, started among an enthusiastic audience. It was in keeping with this year’s conference theme, “Come Together,” which summed up both the goals and feelings of many of those in attendance. “We wanted to be here to show our support for the industry,” Dan Natkin, vice president of hardwoods and laminates, Mannington, told me. FCNews. “It’s also a great opportunity to meet distributors, builders and contractors we haven’t seen in a long time.”
That sentiment was echoed by Chris Thompson, regional sales manager at Quebec-based Boa-Franc, maker of the Mirage brand. With Canada still largely on lockdown, it was vital to get back in front of its US customers. “It’s been quite busy today,” he said on the opening day of the expo. “I’m sure I speak for a lot of people when I say it’s good to be back.”
Across the entire NWFA Expo showroom floor, which was home to approximately 160 exhibitors, the consensus was much the same. For example, the QEP booth had virtually non-stop traffic from opening day until late afternoon on the second and final trading day. “We’re pretty swamped,” said Renee Tester, vice president of marketing, e-commerce and digital. Ditto for Indusparquet, which brought a slew of members to the show. “The traffic was just incredible,” said Jodie Doyle, vice president of sales and marketing. “We are very happy that we decided to show here.”
While the NWFA expo provided an opportunity for suppliers to meet with customers and showcase their latest products, although many report backlogs in both finished products and raw materials, the event also had a different purpose. The conference gave attendees, spanning virtually all channel levels—manufacturer, distributor, contractor, and retailer—to come together to solve some of the pressing issues they face. From runaway commodity prices and shipping delays on water, to ongoing labor shortages and rising inflation, the industry has its hands full.
“Every step in the transport chain is currently facing major problems,” said Martin of the NWFA, referring to the blockades in the ports and the shortage of truck drivers. But that’s not the only challenge. “Wood prices are many times higher than a year ago. It is the fastest increase in timber prices since the housing boom after World War II. We’ve seen estimates showing that the increase in lumber added $40,000 to the average cost of a new home. How this happened is through a perfect storm of supply and demand factors. Couple that with the fact that many of our sawmills went out of business. At the same time, wildfires and plagues in Canada contributed to a further decline in the wood supply.”
It is a situation where no company has an advantage. “These challenges are faced by all manufacturers in North America,” said Paul Rezuke, vice president of sales, US, at Wickham Hardwood Flooring. “The volatility related to the availability of raw materials, the price changes that seem to be weekly, along with the challenges of finding work, are commonplace within the industry.”
The root of many of the underlying problems lies in speculative market practices. Martin of NWFA explained: “When the pandemic broke out, investors took short positions on futures, expecting their prices to fall in the expectation that demand would slow down. Sawmills have reduced backup capacity by 40%. It turned out that the demand for wood was not declining and pandemic-fueled shock trends emerged. Consumer spending on services, travel, dining and entertainment declined as many people began to focus on improving their homes. Low interest rates and stimulative cash fueled a boom in home renovations and new construction, boosting demand. Today sawmills can’t keep up. They can’t build more mills, expand existing ones, or hire them fast enough because of the labor shortage. Hopefully a return to normal is in the offing.”
But it wasn’t all bad news. While uncertainties remain, many specialty retailers and, by extension, hardwood flooring contractors did well in 2020. According to the latest NWFA industry survey, the majority of member companies said 2020 was their best year ever, despite the pandemic.
The road ahead of us
As the US reverses the pandemic, the wood flooring industry is counting on a strong comeback once conditions normalize. But most agree that it will take some time. “Until the labor pool is stable again, it will be difficult for sawmills and manufacturers to increase capacity,” said NWFA’s Martin. “And while we’re still dealing with rising wood prices, it’s starting to come down a little bit.”
If there’s one bright spot regarding the pandemic, it’s that COVID-19 has given manufacturers the opportunity to restructure their businesses. What will come out in the end remains to be seen. “I think a lot of business models are in flux right now,” Martin said. “We’re going to see change coming out of this period, which could be good for everyone.”