Building materials supplier Wolseley has recorded lumber and structural panel price declines of 21% and 27% respectively, in light of “the most severe downturn in the US housing market for sometime”.
UK-based Wolseley has released its trading statement for the 11 months to June 2007, which shows its US operations suffered a 4% decline in revenue and a 17% decline in trading profits.
This has been driven by a 25% decline in new housebuilding in the US and a weakness in the dollar, with Wolseley stating that “there are no signs of an upturn… and the timing of any recovery remains uncertain”.
In light of this, the company has announced that it is to close 24 branches in the mid-west and undertake a further 340 redundancies on top of the 4,000 already announced since November 2006.
“Housing starts continue to be weak,” said finance director Steve Webster. “We are restructuring the branch footprint to have the right infrastructure going forward.”
Wolseley added that the reduction in its cost base would allow the company to be “well positioned to benefit from any recovery in the US new housing market” and that it would continue to look to develop a competitive advantage.
