Once again, leading publications within the LBM industry have crunched the data to offer a look at how leading lumber and building material suppliers are faring and what issues matter most to them today. As in years’ past, two LBM dealer surveys—LBM Journal’s LBM 100 and Webb Analytics’ Construction Supply 150—offer not only a ranking of the country’s top dealers but also a pulse on how the entire residential construction industry is trending.
Not surprisingly, this year’s numbers reflected the economic crunch many in construction are feeling. “While 2022 saw nearly all companies in the LBM 100 post sales gains, 2023 data showed the majority of companies in the LBM 100 saw gross sales drop,” LBM Journal editors reported. “While just six companies reported a year-over-year decrease in gross sales revenue in 2022, more than 70 companies reported drops in 2023.”
Craig Webb, owner of Webb Analytics, made similar observations, noting that he had to go back 15 years to find the same number of dealers reporting sales declines as did in 2023. Three-quarters of the 150 LBM dealers and home improvement stores on the Construction Supply 150 reported revenue declines.
However, LBM Journal noted that the sales drops are not necessarily indicative of total gloom and doom and that LBM dealers are on the move. One commenter noted that 2022 performance was bolstered in part by higher prices; many dealers may have sold a similar amount of product in 2023, but at lower prices. High interest rates also played a role, and those are expected to drop some in 2024. Webb also pointed to the role of volatile lumber prices, detailing a roller coaster of price changes for the commodity products over the past three years.
“While 2023’s ride has been sobering, dealers have emerged safe—and optimistic for the future,” Webb wrote. “On average, CS150 members predicted sales would rise 4.4% this year.” About 70% of Webb’s CS150 are predicting gains in 2024, compared to about 14% expecting declines.
Indeed, dealers certainly haven’t slowed down on making big moves, LBM Journal noted. “Dozens of companies reported expanding operations, making acquisitions and mergers, and celebrating milestone anniversaries in the past year—all signaling investments in the future.”
The majority of dealers on the LBM 100 said they expect to grow in 2024, and 60% of companies said they have plans to expand in the next one to two years—more than had indicated as such in last year’s survey.
Top Trends from the LBM Dealer Surveys
Here’s a look at other trends uncovered in the two LBM Dealer Surveys:
• Hiring woes continue: Labor is still an ongoing hurdle for LBM dealers just as it is for construction companies. Seventy-two percent of LBM 100 dealers indicated that recruiting, hiring, and retaining employees remains a top challenge, roughly equal to last year. Drivers are by far the hardest positions to fill, with 86% of companies indicating such. To combat the issue, many dealers are investing more in their HR teams or outside recruiters, the magazine said, as well as in staff training and development.
• Employment unchanged: Despite the decline in sales, construction suppliers’ overall employment numbers rose a smidge (0.3%, excluding Lowe’s and The Home Depot) in 2023, Webb Analytics reported.
• Manufacturing and installed sales remain a key offering: Almost half of the Construction Supply 150 companies manufacture one or more categories of building materials, with trusses and doors leading the way. Half also offer installed sales.
• Online sales offerings decrease: In the LBM 100, the number of dealers offering online sales dropped from 32% to 30%, though some companies acknowledged that they will need to add these options in the future.
• Rise of the robots? In the LBM Journal survey, one dealer reported using inventory robots to scan for retail outages and pricing, while another is leveraging AI to sell to commodity buyers. The CS150 survey, which includes big box stores, found that nearly 20% of companies are using AI for some part of their operations.
For the company rankings and many more datapoints, view the full LBM Journal 100 here and download the Construction Supply 150 here.
Stay up on the latest industry trends by subscribing to our enewsletter here.