Lumber Companies Cut Back on Production, Jobs

Smithfield, N.C. — The struggling housing market has begun to have a harsh impact on local lumber companies and the people they employ.

Lumber company officials say production is getting cut back and layoffs are becoming common as the housing crisis dampens demand in the Triangle.

"There's no demand (for the lumber industry) with the houses that are staying on the market and no new building going on," said Rosemary Champion, with the Franklin County Homebuilders Association.

In January, home sales in the Triangle dropped 29 percent, compared with a year earlier – while the number of homes on the market jumped by 25 percent, and the average wait for sellers increased 50 percent.

Those numbers have translated into a harsh reality for employees of Keener Lumber Co., company president Wade Stewart said.

Keener Lumber has been a fixture in North Carolina for nearly half a century, with mills in Johnson and Sampson counties. Around 150 workers typically labored to produce about 40 million board-feet of lumber each year.

But about 40 employees lost their jobs when slack demand forced the closure of Keener Lumber's Sampson mill, Stewart said.

Pruitt Lumber in Franklin County has laid off 10 percent of its work force, company officials said.

"That's a bigger story than Wade Stewart or Keener Lumber," Stewart said.

Conditions in the lumber market have become so bad that he has been forced to rethink how he does business, Stewart said. The sale price of lumber has gone down, while the purchase price of timber has gone up, he said. Production at Keener is down 40 percent.

"Making a profit is about out of the question," Stewart said. "All one can do now is retain our customer base and keep them supplied with the amount of lumber they need."

Stewart said he is trying to weather the crisis in the housing market and hopes to reopen both mills with a full staff.

"The economy will eventually come back, as it always does," Stewart said.