The Business At Hand

Article by Rich Donnell, Editor-in-Chief, Panel World January 2023

Some forecasts coming out of APA—The Engineered Wood Association annual meeting in October painted a rather bleak economics picture for 2023. It was no surprise, given the already downward trending in housing starts, the steady upticking in interest rates and the gradual decline in many panel prices toward pre-pandemic levels. Though a couple of attendees mentioned to me that they thought the outlooks came across a little too negatively. “We aren’t there yet,” a producer executive said to me. “We’re doing okay at the moment.”

But barring the unforeseen, 2023 stands to be a challenging year, with some producers weighing production reductions while mill expansions still wrestle with supply chain issues and for that matter decide they aren’t in a hurry anyway.

No doubt many operations are already catching their breath following the tremendous post-pandemic surge. Now it becomes a matter of tweaking and timing.

A soft market is a good time to assess how the operation and mill fared through the hard run during the up market. Certainly through good times or bad most operations have systems and programming, and human beings, in place to provide immediate data feedback, but there’s nothing like a deliberate analysis, the results of which can range from everything to the need for a piece of equipment, to updating systems, to adding QC personnel, to simply a new paint job.

As you take a deep breath is also a good time to analyze where your company or operation is culturally. Running flat out 24 hours a day can push cultural principles (except for safety we would hope) to the side, though ideally the perfect operation is one that can blend seamlessly full production and the cultural personality, or mission statement, you’ve defined for it.

Did your operation’s cultural goals or principles live up to themselves during the production boom? If not, what do you need to do to solidify or enhance them? While your mill is not pushing production is a perfect opportunity to refurbish your cultural identity, perhaps even reevaluate it and establish new parameters for it; or, if you haven’t already done so, start from scratch to being to implement a cultural spirit.

Before we know it, we assume anyway, the building products markets will rebound and the industry will be producing at Indy 500 speed once again; so now is the time to get everything in order in time to make the green flag and to be able to coast through the yellow flags and to be satisfied with how you’ve performed come the next checkered flag.