Much like other wood products, plywood cost has seen a wild ride over the last year or two. Seeing historic highs and unpredictable volatility, predicting long-term plywood cost has become somewhat of a fool’s errand.

Since its introduction over a century ago, plywood has become an integral part of both the American and World economies. From the outside looking in, this can seem to be a puzzling statement. How can plywood cost, the cost of fabricated wood panels, have such a pull?

The answer to this question lies in the myriad of uses for plywood. Manufacturing, transportation, construction, and the general public all use plywood for different reasons. In our case, it’s to create quality wood packaging that’s second-to-none!

With copious amounts of use, plywood costs can add up fast. This makes the wood panel market, a combination of plywood and OSB, a multi-million dollar industry in the United States. With an industry this large, changes in plywood cost can create supply chain disruptions and even some halts in different manufacturing processes. This is why it’s so important to understand what exactly is happening in the world of plywood.

Let’s take a look at plywood cost’s story over the last two years, what the current trends on the market look like, and what conditions it would take to bring plywood cost back to a true ‘normal’. If your business uses plywood, understanding these factors can cause a substantial change in the way you buy, sell, or use plywood.

Through 2020 and 2021, lumber was hit extremely hard, plywood cost was no different.

At the very beginning of the pandemic, plywood cost was relatively normal – increasing at the normal rate that it had been. As the lockdowns drew on, however, these prices didn’t stay the same. With people stuck at home, DIYers significantly ran up the price of almost all wood products. Lumber, OSB, and plywood costs all started to climb at a ridiculous rate throughout 2020.

Early in 2021, many people across the nation began to have more optimism regarding the economy.  Various industry professionals thought that the lumber and wood panel markets were going to start going back down. This prediction was both reasonable and economically sound… but unfortunately, 2021 had other ideas.

By April of 2021 plywood cost had shot up more than 200% above normal across the United States. This jump was not only unforeseen, buy unprecedented in every way imaginable. With high demand for almost every wood product imaginable, continuous labor shortages and supply chain issues exacerbated the demand that was already there. With high demand and no way to meet it, plywood costs skyrocketed like they never have before.

Luckily, these prices were not only unimaginable but unsustainable. Over the Summer months and into the Fall of this year, plywood cost has gradually been decreasing for the first time in over a year and a half. Although this price drop has made everyone’s lives easier, the gradual inflation we’re currently experiencing continues to loom in the distance.

One of the biggest factors that had driven plywood cost through the roof has been the availability of plywood in general. With such high demand across the nation, the availability of plywood had drastically decreased – making it scarce and valuable.

As plywood cost has continued to drop, availability has continued to increase. We’re not quite at pre-pandemic levels of plywood yet, but we’re getting there. With more and more manufacturers getting their hands on plywood, the wood panel industry is finally starting to look similar to what we’ve seen in the past.

Like many things though, we might have to prepare ourselves for a new normal. Inflation continues to increase day-by-day and very well may start to have a greater impact on wood products going forward.

No one can predict the future – this is a lesson all of has have been forced to accept over the past few years. What we can predict, however, are the conditions that would see the rebound of plywood cost back to pre-pandemic levels.

For plywood costs to continually drop, a few things need to happen.

Supply chain issues need to be resolved, specifically in transportation. The shortage of truck drivers has had repercussions through almost every industry, affecting every product in a unique way. Plywood is no different. To reduce plywood costs further, labor shortages in transportation must be curtailed.

Labor shortages aren’t exclusive to the transportation industry. These shortages have also been a massive problem for manufacturing jobs across the nation. Labor shortages in wood panel manufacturing continue to increase plywood costs. With fewer workers in the mills, less plywood gets made. With less plywood getting made, the cost goes up. Although this is simple economics, it’s worth being said. Manufacturers across the nation are continuing to face this problem – nothing will return to pre-pandemic levels until this is fixed.

Lastly, it’s worth talking about what’s on everyone’s mind – inflation. This inflationary period we’re currently experiencing seems to have no end in sight. As of right now, lumber industry experts expect the costs of plywood, and various other wood products, to incrementally adjust to national inflation. Regardless of your opinion on national spending, we can all agree that if this inflation continues, everything in all of our lives will get more expensive, even plywood.

When and if these three problems are resolved, not only will plywood costs continue to decrease, but the costs of millions of other industrial and consumer products will decrease as well.

Hopefully, from what we’ve covered in this article, the story of plywood cost over the last few years has been made a little bit clearer. If one thing is for sure, this story has been dramatic. With sharp rises in plywood cost, its slow decrease, and the changes that will need to happen for costs to continually decline, we hope you leave this article feeling more knowledgeable not only about plywood cost but about what it will take to get us back to normal.