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April 1, 2009
MARKETPLACE
 
Lumber Markets Expected To Reach Historic Low Before Starting Slow Recovery In 2010

PORTLAND, Ore. – Demand for lumber in the U.S. in 2009 will slide to the lowest level in modern history, then move toward a slow recovery starting next year, according to a new forecast issued by Western Wood Products Association.

The poor economy and a housing market that has plummeted to historic lows are the chief reasons for the remarkable decline in lumber demand. WWPA predicts U.S. lumber demand will slide this year to just 28.9 billion board feet, down almost 30 percent from 2008 totals.

Since reaching an all-time high of 64.3 billion board feet in 2005, U.S. demand for lumber has dropped by more than 55 percent – the steepest decline in the history of the industry.

Home construction traditionally accounts for more than 45 percent of the lumber used each year. The Association estimates just 432,000 houses will be started in 2009, down more than half from 2008 totals and one-fifth of what was built in 2005.

The volume of lumber used in new home construction is expected total 5.3 billion board feet this year, compared to the 27.6 billion board feet consumed in home building in 2005.

In 2010, housing is forecast to improve modestly to 553,000 starts, bringing lumber consumption to nearly 30 billion board feet. WWPA does not expect housing starts to exceed
1 million units until 2012.

The unprecedented decline in demand has taken its toll on lumber producers. Western lumber production is forecast to decrease nearly 26 percent to 9.7 billion board feet. That volume is the lowest since the 1930s and represents a little more than half the volume Western mills produced five years earlier.

Mills in the U.S. South will see production declines as well, falling to 10.9 billion board feet in 2009. In all, U.S. lumber production will total 21.8 billion board feet this year, down 25 percent from 2008. As markets start turning up in 2010, U.S. production will rise to 22.4 billion board feet.

Poor markets have been even tougher on Canada and other foreign lumber suppliers. Lumber imports from Canada are predicted to total 7.6 billion board feet in 2009, a decrease of 34.7 percent from the previous year. Since 2005, Canadian lumber imports have declined by nearly two-thirds, or some 14 billion board feet.

Other imports, including lumber from Europe and Latin America, should decline by double-digit percentages for the fourth straight year and lose more market share to domestic producers.

Western Wood Products Association represents lumber manufacturers in the 12 Western states. Based in Portland, WWPA compiles lumber industry statistics and provides business information services to mills. The Association also delivers quality standards, technical and product support services to the industry.

Source: Western Wood Products Association, March 24, 2009


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Brought to you by the Steel Framing Alliance (SFA) on the first Wednesday of each month, Framework Online arms you with the latest news and commentary on the steel framing and construction industries. In addition to industry headlines, trends and project profiles, Framework Online provides information and ideas that will better enable members to increase their participation in the residential and commercial construction markets.