Monthly Update: May 2020

Analysis from Lodging Econometrics indicates that despite disruptions caused by the coronavirus outbreak during the last month of the quarter, the U.S. hotel construction pipeline increased by 1% in the number of projects and by 3% in the number of rooms between the first quarter of 2019 and the first quarter of 2020. The number of hotels under construction in Q1 2020 was at an all-time high.

However, in anticipation of growing disruptions, some hotel owners have extended their opening and construction start dates by four to six months. Meanwhile, some hotel owners are taking the opportunity to renovate and reposition their properties because of the drop in occupancy.

Read more about the segment’s yearly trends here.

ArchDaily, in an article sponsored by Think Wood, singled out mass timber and wood frame constructions for their distinct competitive advantages and suitability for offsite, prefabricated construction. Prefabricated wood elements consistently offer material and time efficiency, leading to reduced waste and faster construction timelines, which in turn control cost. Wood’s versatility also allows architects and designers to achieve their diverse design goals, while its renewable nature and biophilic properties score high marks for sustainability.

Read more here.

Qualified Remodeler, a leading magazine serving residential remodelers, recently released its 2020 Outdoor Planning Guide: Regional Insights. While outdoor living is a strong, nationwide segment, Qualified Remodeler’s surveying suggests that there are important regional and geographic differences to keep in mind when assessing and pursuing market opportunities, including in decking.

See more from Qualified Remodeler’s Outdoor Planning Guide here.

Richard Branch, chief economist for Dodge Data & Analytics, recently presented Dodge’s construction forecast, which had been revised downward for the year because of the novel coronavirus pandemic.

Dodge currently predicts that the U.S. economy will decrease 2.2% in 2020, with a 2.5% decrease in the first quarter, an 18.3% decrease in the second quarter, and a boost in the second half of the year, provided COVID-19 peaks in May. Dodge predicts sometimes steep declines in starts across all construction segments, including single family, multifamily, commercial, and institutional. For example, Branch expects to see a 13% decline in the multifamily segment and a 16% decline in the commercial segment in 2020.

Dodge expects the economy to improve in 2021, with most growth coming in the second half of the year, and again in 2022.

Read all of Dodge’s predictions here.

In a recent piece exploring CLT as a structural building material, Forbes turned to the experts at WoodWorks for more information on mass timber’s strength, versatility, fire safety, and cost-effectiveness for multistory and large building applications. While the piece notes CLT’s popularity in commercial and institutional projects, Bill Parsons, WoodWorks’ Vice President of Operations, also noted mass timber’s growing acceptance in the multifamily sector, whereas with public and office buildings, developers are likely to prioritize aesthetics and biophilic benefits. According to Parsons, mass timber is a good fit across these applications as “mass timber products, such as CLT, can be used to create customizable spaces with open floor plans and exposed wood.”

Parsons also noted mass timber’s proven and code-compliant performance in the event of fire as another important attribute that is supporting its uptake across applications.

Read the full article here.

The U.S. Department of Agriculture, Forest Service, recently published nationwide and state-level estimates of greenhouse gas emissions and removals from forest land, woodlands, and urban trees in the United States from 1990-2018. According to its data, forest land, harvested wood products, and urban trees collectively represent the largest net carbon sink in the country, offsetting more than 11% of total greenhouse gas emissions annually.

The category “forest land remaining forest land” was the largest net sink, while conversions from forest land were the largest source of emissions across the categories considered in the Forest Service analysis.

To view the report, as well as state-level estimates, click here.

The coronavirus pandemic is causing immediate economic impact, and the LBM sector, while deemed essential in the majority of municipalities, is unlikely to be immune. ProSales magazine surveyed 130 LBM professionals over a week in early April to gain insight into the likely impact on their operations.

Of dealers surveyed, nearly 56% indicated that their companies had already experienced a decrease in customer demand because of the pandemic; 50% believed the pandemic will negatively affect their business for more than six months; more than half believed that their companies will lose up to 30% of their revenue in 2020; and nearly half were at least “somewhat worried” that lost revenue could force their company to close permanently.

ProSales will repeat the survey in May. To view April and future survey results, visit https://www.prosalesmagazine.com/.

In a recent blog post, Whitney Airgood-Obrycki, research associate at Harvard’s Joint Center for Housing Studies, predicts that single family and multifamily construction will be delayed in the near-term because of the coronavirus, based on four key factors:

• Local and/or state governments’ shutdown of nonessential construction.
• Material supply-chain disruptions, which are already affecting marble, tile, paving stones, lighting, and elevators and are forcing builders to look anew for U.S. suppliers. Disruptions to safety-equipment supply chains are also widespread.
• Health risks to the construction labor force because of the nature and proximity of jobs on construction sites.
• Local building-service office closures or adoption of new processes, which are leading to delays in permitting, reviews, and inspections.

Read the blog here.

Oregon’s ABC News affiliate KEZI 9 News has launched a series and resource center titled Greener & Cleaner Working Forests to highlight the timber industry’s important contributions to the state and to answer questions about forestry in Oregon. As part of the series, KEZI produced a video citing CLT and other mass timber products as keys to making the skylines of the world more environmentally responsible and sustainable. View the video here or access the KEZI resource center here.