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Market Recap: RISI Crow’s Construction Materials Cost Index

BY HBSDEALER Staff

 

A price index of lumber and panels used in actual construction for Aug. 17, 2012

*Western – regional species perimeter foundation; Southern – regional species slab construction.

Crow’s Market Recap — A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow’s Weekly Market Report.  

Lumber: Strong buying, particularly at midweek, sent SPF lumber prices higher. Mill order files extended into early September. By Thursday, sales at western mills slowed, as losses in September’s futures contract pushed it slightly below cash. Southern Pine dimension lumber prices were mixed. Retailers looking for specified tallies still had some difficulty finding the right mixes at mills. Often, they turned to distributors to cover needs. Prices for Coastal species remained solid as a rock, as buyers continued to absorb available production. Despite escalating green Doug Fir prices and their narrower gaps with dry prices, mills continued to keep production in line with demand. When Inland species lumber buyers went looking for wood, they found a limited selection being offered by producers. Eastern White Pine board producers continued to enjoy a firm market, with sales to both offshore and domestic buyers. Upper grades of Sugar Pine boards were not isolated from downward price pressure, in spite of light inventory levels at the mills. Weakness persisted in the Ponderosa Pine boards market. The lack of business was most notable in the upper grades, where producers were open to counters. The market for the upper grades of Ponderosa Pine Shop remained in the doldrums. Radiata Pine activity was similar to Ponderosa Pine. Sales of Mldg&Btr were low, as offerings were light. Activity for Shop grades was almost non-existent. Blanks were in short supply, but inquiry levels were also light. Any pressure on Western Red Cedar prices in either direction was minimal, although producers did admit to carrying more volumes of some items than were carried earlier this summer. Buyers, wanting to keep inventories in line with takeaways, purchased hand-to-mouth, highly specified orders.

Panels: OSB sales volumes reduced as order files extended into late September and beyond. Sales out of distribution remained active as dealers turned to the DCs for quicker shipment times. Southern Pine rated sheathing prices edged higher, now increasing for five consecutive weeks. Producers reported a moderate yet "good" week of sales activity. Order files moved solidly into the weeks of September 3 and 10. Tight supplies continued to propel Western Fir plywood prices higher. With mill order files out to mid September, buyers turned to wholesalers for quicker shipping volumes. Canadian plywood producers spent a lot of their time following up on requests from customers for status updates on previously made purchases. Mill order files to the week of September 17 or further kept many buyers on the sidelines. MDF buyers clearly need more product than what the market is currently producing. Particleboard prices were stable.

For more on RISI, click here.

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Industry Dashboard for Aug. 20, 2012

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“Ahead of last year, but behind last month” describes both of the housing-starts dials. Gas prices are higher now than last week, last month and last year.

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Large employers expect health benefits costs to increase 7% in 2013

BY Stephen Miller

With the cost of employer-provided health care benefits at large U.S. employers expected to rise another 7% in 2013, employers are eyeing a variety of cost-control measures including asking workers to pay a greater portion of premiums but also sharply boosting financial rewards to engage workers in healthy lifestyles, according to a new survey by the National Business Group on Health, a nonprofit association of large U.S. employers.

The survey, based on responses from 82 of the nation’s largest corporations, was conducted in June 2012.

It revealed that:

• Employers expect their healthcare benefits costs will increase an average of 7% in 2013 — the same as in 2012 but a smaller increase than employers experienced the previous three years.

• 60% expect to increase the percentage of the premium paid by employees in 2013, although most indicated that the increase would be by a small amount (less than 5%).

• 40% expect to increase in-network deductibles.

• 33% expect to increase out-of-network deductibles.

• 32% expect to increase out-of pocket maximums.

“Rising healthcare costs continue to plague employers at an alarming rate,” said Helen Darling, president and CEO of the National Business Group on Health, in a press statement. “Although cost increases have stabilized somewhat, they are still on a higher base from last year and are simply not sustainable, especially when our nation’s economy and workers’ wages are virtually flat and everybody is struggling.”

As a result, “HR leaders need to keep the pressure on to control health care cost increases, increase consumerism and individual accountability, use all of the tools and resources available to empower consumers to be wiser purchasers and support them to choose healthier lifestyles,” Darling advised.

Cost-curtailing strategies

While many employers continue to adopt cost-sharing provisions, survey respondents now consider consumer-directed health plans (CDHPs) and wellness initiatives to be more effective at stemming costs than shifting costs to employees. According to the survey:

• 43% of respondents cited a CDHP as the most effective cost control tactic, followed by wellness programs (19 percent).

• Just 9% reported increased employee cost-sharing as the most effective tactic, whereas a year earlier cost shifting was cited as the most effective measure.

Increasing wellness initiatives

The survey found that employers — in their efforts to engage employees in healthy behaviors and lifestyles — continue to experiment with and perfect the best ways to incorporate financial incentives into wellness programs. While nearly half of respondents (48%) use incentives to encourage participation in programs, more employers are basing incentives on specific health outcomes:

• 44% provide an incentive based on tobacco-use status.

• 29% base awards on achievement of outcomes such as body-mass index (BMI) or cholesterol levels.

• Just under one-quarter of respondents (22%) take a different approach — applying surcharges to employees for not participating in certain programs.

The survey reported that employers plan to sharply increase the incentive amount for maintaining a healthy lifestyle or participating in a wellness program. Among employers that offer incentives:

• The median amount employees can earn will jump 50% from $300 in 2012 to $450 in 2013.

• The median incentive amount that dependents can earn is expected to increase from $250 to $375.

Changes under healthcare reform

Respondents were asked what changes they made or are planning to make as regulations from the Patient Protection and Affordable Care Act (PPACA) continue to come into effect. The survey found the following:

Annual benefit limits: For plan years beginning on or after Jan. 1, 2014, group health plans may not establish annual dollar limits on essential health benefits. Annual limits may not be less than $2 million on or after Sept. 23, 2012, to Jan. 1, 2014. Half of all survey respondents indicated they no longer have any annual benefit limits in place. Among employers making changes for 2013, the most common benefits requiring adjustments to their annual limits were mental health and substance abuse (cited by 9% of respondents) and rehabilitative services and devices (also cited by 9%).

Grandfather status: A grandfathered health plan isn’t required to comply with some of the consumer protections of the PPACA that apply to other health plans that are not grandfathered. The majority of respondents (57%) no longer had any health plan options in grandfather status in 2012, compared with 49% in 2011.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).

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