Great American Group Observes Rising Lumber Prices and Margin Compression in
the Building Materials Market
-Rising lumber pricing, combined with difficulty implementing price increases
to customers, results in short-term margin declines, but the industry remains
ahead of last year-
WOODLAND HILLS, Calif. -- February 5, 2013
Despite margin compression at the distributor level, Great American Group,
Inc. (OTCBB: GAMR) notes that the overall construction industry experienced a
strong push at the end of 2012.
Great American Group’s latest Building Materials and Woodworking Equipment
Monitor notes that demand for lumber has been spurred by tight supplies and
strong residential construction numbers. However, due to the steep upward
trajectory of market pricing, distributors have had a difficult time adjusting
selling prices to customers.
"While domestic demand continues to be strong, and there remains mild optimism
for continued growth in 2013, tightness of supply in the market appears to be
the primary driver of commodity pricing,” said Bill O’Brien, senior project
manager for Great American Group’s Industrial Appraisal division.
Although margin compression remains a short-term concern, Great American Group
analysts are optimistic for the construction industry. The pace of
nonresidential construction has been modest in comparison to the residential
market, but certain private enterprises are expected to buoy the
nonresidential segment, despite budgetary constraints in the public sector.
“Publicly-funded projects are likely to disappoint, while privately-funded
building is expected to catalyze a somewhat humble increase in overall
nonresidential spending," O’Brien said. “Major growth is forecast in markets
that exhibited strong trending to end 2012, including construction related to
offices, power, lodging, healthcare and manufacturing.”
Great American Group’s premier Building Materials and Woodworking Equipment
Monitor is available at
For more information about asset disposition, valuation and appraisal services
available through Great American Group, visit www.greatamerican.com.
About Great American Group, Inc. (OTCBB: GAMR)
Great American Group is a leading provider of asset disposition and auction
solutions, advisory and valuation services, capital investment, and real
estate advisory services for an extensive array of companies. A trusted
strategic partner at every stage of the business lifecycle, Great American
Group efficiently deploys resources with sector expertise to assist companies,
lenders, capital providers, private equity investors and professional service
firms in maximizing the value of their assets. The company has in-depth
experience within the retail, industrial, real estate, healthcare, energy and
technology industries. The corporate headquarters is located in Woodland
Hills, Calif. with additional offices in Atlanta, Boston, Charlotte, N.C.,
Chicago, Dallas, New York, San Francisco and London. For more information,
call (818) 884-3737 or visit www.greatamerican.com.
Great American Group
Michelle Kahan, Director of Marketing
Mulberry Marketing Communications
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