Skyrocketing Lumber Prices Reveal an Optimization Opportunity

Lumberyards, builders,?contractors, and homebuyers are all feeling it: The?sticker shock?of skyrocketing lumber prices.?Whether this trend is on the rise or in the rearview mirror,?the past?year?has hammered home the importance of efficiency when it comes to estimating lumber resources.

According to the National Association of Home Builders (NAHB)?the price per 1,000?board-feet lumber?increased?approximately?250 percent between?April 2020 and April 2021. The reasons are?both?varied and cumulative:?Unusually?high demand for housing, lumber?tariffs,?and a pandemic that was?predicted?to shut down the?industry?but seemed to have the opposite effect, which?caught everybody in the supply chain flat footed.

Other?forecasts?indicate that the?building?material?madness may have peaked,?noting that?the?May 2021?price per 1,000 board?feet of lumber dropped?from $1,700 to $1,453, according to?Fortune.?Even so, lumber prices are still well above pre-pandemic levels, and?most experts?are?guessing?the?costs?will stay above 2019 levels for the long haul.

To compensate,?builders?and contractors are?trying a little of everything to cut costs and improve efficiency, from implementing?elaborate?lean building practices, to?restoring and reusing demolition lumber. Lumberyards?and suppliers?can help by optimizing their quantity takeoffs,?to prevent waste and ensure builders get the most out of every board foot.?That’s where Paradigm Estimate can lend a hand.

Paradigm Estimate is a technology-driven takeoff service that optimizes your takeoffs, so you can recommend just the right amount of material.? Consider a takeoff for headers as an example.

Paradigm Estimate is helping lumberyards
achieve up to 97 percent usage in lumber estimates.

Traditionally, producing header lumber takeoff requires estimators to convert total lineal footage of rough openings to an in-stock board length that is predetermined by the customer. Then they throw in a 20 percent waste factor, because builders on job sites tend to grab whatever board they want and start cutting, even if it means throwing away part of the board. This approach is not only wasteful, but it’s expensive, and could be time-consuming if the builder comes up short on material and has to reorder.

Alternatively, the technology driving Paradigm Estimate’s takeoff service optimizes header measurements by accurately calculating window openings’ actual widths and bearing allowances. Then it specifies the exact amount of header stock, applies it to your parameters for sellable board lengths, illustrates how many openings you can get per board, and produces a detailed cut list that can be used on-site.

In header construction examples like this, Paradigm Estimate is helping lumberyards achieve up to 97 percent usage in lumber estimates. Put another way, that’s just three percent waste for all headers in a job. Pretty good, considering it’s common for lumberyards to?over-estimate waste, while up to 40 percent of jobsite waste can be found in excess or unused lumber, according to NAHB.

Accounting for waste will always be part of the estimating function, but estimators can?do?better with an optimized takeoff from Paradigm Estimate that specifies more efficient material usage and helps you create a more competitive price point.