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Lumberyard Revenues Outpace Specialty Dealers, Big-Box Stores, New Report Shows

Reinhard Tiburzy/Alamy Stock Photo Lumber logs stacked on top of one another on top of a truck against the background of a blue sky
The annual Construction Supply 150, released by Webb Analytics, examines a mosaic of data from the lumber/building material distribution channel, including sales and hiring trends, mergers and acquisitions, and more.

High lumber prices in 2021 helped drive a nearly 20% revenue increase by companies in the Construction Supply 150, according to a comprehensive report released annually by Webb Analytics. This data and consultancy firm is led by award-winning industry leader Craig Webb. There were also vast differences in growth from one company to the next, highly dependent on how much wood a company sold, according to the report. 

The 2021 Construction Supply 150 noted $373.73 billion worth of revenues by companies that sell construction supplies in the U.S. Operations in Canada and Mexico added another US$20.57 billion.  

This year for the first time, the report includes the entire list for each of the five subgroups—lumberyards with manufacturing, lumberyards without manufacturing, lumber-centric manufacturers, specialty dealers, and home centers and hardware chains—to allow for a more straightforward look at where all members sit in their respective subgroups.

Here are a few of the biggest takeaways from the 2021 report:

Big Moves in M&A

One of the most intriguing parts of the report centers around mergers and acquisitions. According to the report, there's a belief that such a large number of construction supply companies were being considered for acquisition in fall 2021 that all potential deals were unable to be processed. In the end, 156 total deals caused nearly 700 construction facilities to change hands in 2021.

Additionally, there were more than 160 greenfield openings of sites—a sign that, according to the report, indicates some companies were so eager for growth that they weren't willing to wait for another company to leave the market and thus a facility. 

Hiring is Tough, but Benefits Are Improving

As with industries across the board, construction is experiencing hiring and retention problems. The survey found Construction Supply 150 members reporting challenges in attracting and retaining workers. Nearly half the companies rated finding truck drivers a 10 on the 1-to-10 scale of difficulty. 2GGT7DC.jpg

For employees, though, changes can be good. Just under 50% of survey companies who told Webb Analytics about their benefits noted they have started to let some employees work from home permanently. In addition, around one-third of those surveyed said they had increased the number of days off for each employee, and one-third have stopped requiring employees to have a year of employment before taking vacation. 

Sales Growth Resulting From Lumber Prices

While less than a percentage point separates the Construction Supply 150's sales growth in 2021 from what they achieved in 2020, the way they got there has changed due in large part to one thing: the price of wood. Revenue for lumberyards with truss companies and other components plants saw revenues rise 58.6% in 2021 over 2020, and lumber-centric manufacturers rose 57.3%. On the flip side, specialty dealers saw revenues grow by just over 26% in 2021, and home centers and hardware chains recorded just over 11% in revenue gains. 

And while many companies used this influx of money to participate in the merger and acquisitions market or greenfielding, even those who didn't could produce considerable increases in revenue if lumber was their main stock in trade. 

How This Represents the Industry

But just how illustrative is this 150-company list of all companies that sell construction supplies to the pros? “I get asked all the time about how big the LBM market is,” Webb said in a press release. “The truth is, nobody knows for sure. You normally would rely on federal data to get a sense, but gaps in how the government classifies reports from dealers make it hard to size the market. In this new report, Webb Analytics gives a breakdown that we believe indicates CS150 members’ $373.73 billion represents about three-quarters of all sales at building material and supplies dealers, excluding paint stores.”

The 52-page report in its entirety is available for free download at webb-analytics.com. 

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