With the housing recession now in its second year, gypsum wallboard prices have sunk to historic lows as demand in the oversold market continues to evaporate. Producers of gypsum wallboard, which is particularly tied to home building, are especially hurt as capacity invested during recent boom times now sits idle. Prices for gypsum wallboard in July were 20% lower than 2006, according to the Bureau of Labor Statistics. It is a trend economists agree will continue into next year.
“Gypsum wallboard producers will look back on 2007 as a horrible year,” says John Mothersole, senior economist at Washington, D.C.-based Global Insight. “The magnitude of the downturn has swamped everything and it will continue into 2009 as we expect housing starts to continue to drop in 2008.”