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New research from Rocky Mountain Forest Products (RMFP), the leading Colorado lumber supplier, shows that while Covid initially halted building projects around the nation in early 2020, construction spending levels bounced back to surpass pre-Covid levels several months later. RMFP, which supplies lumber to more than 2,500 Colorado contractors, said the numbers also indicate the construction boom is likely to continue through 2021 and beyond.
Since 1974, RMFP has been sourcing lumber directly from the mill to the end-user, cutting out the costs of dealing with a middleman. Whether for large building contractors or DIY-ers trying to get the best-priced lumber for deck projects, RMFP offers its customers wholesale prices on premium wood and composite products for decks, fences, and siding. The company has seen its fair share of hard times, almost closing its doors forever during the mid-1980s recession. However, after streamlining its operations, diversifying its options, and investing in proactive marketing, RMFP now boasts more than 1 million customers served and counting.
According to the RMFP’s data, monthly construction value had been rising steadily every year since the 2008 financial crisis, reaching an all-time high of $1441.1 billion per month in February 2020. Then, the Covid crisis took hold of the United States in March, and everything came to a screeching halt, including construction. From February 2020 to May 2020, the overall value of construction projects dropped a whopping $72 million. The market quickly rallied, however, and by November of 2020, construction spend was up to $1,459.4 billion per month — the highest value the indicator had reached for the sector.
In addition to examining total construction value, the Denver lumber company’s data also examines gross output, or profits. For the first quarter of 2020, profits measured roughly $1,776.0 billion. By the second quarter of 2020, revenues plummeted by almost 14 percent or $51.3 billion. By third quarter, however, profits had jumped by over $40 billion and were just $24 billion shy of pre-Covid rates.
Out of 20 different industries, construction fared much better than others. Statistics show that only five industry sectors came through Covid better than construction: Finance and insurance, government, information, utilities, and management of companies and enterprises. But a few areas in the construction industry continue to struggle.
“Some segments of the construction industry, such as hotel and retail starts, will take longer to rebound fully,” said RMFP Marketing Director Taylor Poole. “But single-family housing starts, where lumber is the key ingredient, have already blown past pre-pandemic levels. They were up 14 percent in 2020 and are expected to continue climbing in 2021,” said Poole.
Add to that a growing number of consumers who suddenly found themselves with a lot of time on their hands and nowhere to go, and you have a recipe for increased sales. Anecdotal reports and surveys suggest that more than half of homeowners started a home improvement project during the initial Covid quarantine phase from March 2020 through June 2020. RMFP saw a 29 percent increase in its year-to-date profits from January through May of 2020.
Poole attributes RMFP’s success in part to the Colorado governor declaring early in the pandemic that construction was an essential industry. While big-box stores experienced shortages due to supply chain interruptions created by Covid, “we were able to stay open and supply our customers with the materials they needed,” said Poole.
Covid may have stalled the construction industry temporarily, but it looks like the sector is headed for a resounding comeback by all indications. To learn more about Rocky Mountain Forest Products, visit www.rmfp.com or call (303) 647-9185.
About Rocky Mountain Forest Products
Rocky Mountain Forest Products is the largest supplier of lumber in the state of Colorado. They import lumber directly from the mills and sell it wholesale to retail customers. For more than 40 years, RMFP has been helping builders and homeowners complete their projects under budget.
