PORTLAND, Ore. – Lumber mills are starting to emerge from the worst downturn in the history of the industry and recovery will be slow yet steady, according to a new forecast released by Western Wood Products Association. The lumber trade association’s forecast calls for modest gains in housing, lumber consumption and U.S. production this year after setting modern lows during 2009. While markets are expected to improve in the coming years, lumber demand and housing construction will remain far lower that what the industry saw in the mid-2000s.
Demand for lumber in the U.S. is expected to increase 6.1 percent in 2010 to 32.9 billion board feet, ending consecutive 20-percent-plus declines recorded the previous two years. WWPA anticipates lumber demand to rise to 36.1 billion board feet in 2011, up 9.7 percent. More housing construction will help boost lumber demand. Housing starts plummeted to 554,000 units in 2009, the lowest annual total since 1945. For 2010, total housing starts are forecast to increase 11.9 percent to 618,000 and then climb again in 2011 to 719,000 units.WWPA Economic Services Director David Jackson said there are too many obstacles for a more robust recovery in housing. “Our country hasn’t really resolved the key problems that led to this downturn,” said Jackson.
Western mills may finally see some relief in the markets, with production in the region expected to rise 7.1 percent to 11 billion board feet this year. Output from Western sawmills should rise again in 2011 to 11.8 billion board feet.
The latest downturn further reduced the number of lumber mills operating in the West. The region has fewer than 170 sawmills producing lumber today, compared to 287 mills operating a decade earlier. During the peak year in 1987, when production totaled 23.9 billion board feet, there were 702 mills in the West.
Lumber production in the Southern U.S. is forecast to increase at a slower rate in 2010, but still remain above Western volumes. Mills in the South should produce 11.7 billion board feet of lumber this year, about the same volume as 2009. Next year, production volumes in the South should rise to 12.5 billion board feet. The volume of lumber imported to the U.S. dropped precipitously in 2008 and 2009, falling by nearly half. Lumber imports, mostly from Canada, are forecast to increase 10.7 percent to 9.8 billion board feet.
Assuming the U.S. dollar will weaken, giving foreign lumber producers some exchange rate advantages, import totals could grow to 12.6 billion board feet by 2011. Despite such an increase, the volume of foreign lumber entering the U.S. will be far below the record 24.7 billion board feet imported in 2005.
This press release was compiled by the Western Wood Products, which represents lumber manufacturers in the 12 Western states. Based in Portland, WWPA compiles lumber industry statistics and delivers quality standards, technical and product support services to the industry.