The historic downturn in lumber demand will likely extend another year
until the American financial system and housing market can be repaired,
according to a new lumber supply and demand forecast from Western Wood
Products Association.
According to the lumber trade association, lumber demand is expected to
drop 15 percent to 44.3 billion board feet this year, then fall another
3 percent to 43 billion board feet in 2009. In just three years, demand
for lumber has plummeted by some 20 billion board feet -—
more than what Western mills produced in all of 2005.
Housing starts are forecast to reach just 993,000 in 2008 and decline
again to 933,000 next year. Since new housing typically accounts for
more than 40 percent of annual lumber demand, the more than 50 percent
decline in starts from 2005 has been a body blow to lumber mills.
The volume of lumber used in new home construction is expected to total
11.8 billion board feet in 2008 -— less than
half of the 23.3 billion board feet used just two years earlier.
Production in the West should total almost 14 billion board feet this
year, slipping to 13.6 billion board feet in 2009. That would be the
lowest annual volume since 1982. Since 2005, output at Western mills has
declined some 28 percent, or more than 5 billion board feet.
Lumber production in the U.S. South is forecast to decline 9 percent to
15.2 billion board feet this year, then fall 2 percent next year.
The demand decline, coupled with unfriendly currency exchange rates and
higher transportation costs, is taking its toll on lumber import
volumes. Following a 19 percent decline in 2007, total imports this year
are forecast to decrease 21 percent to 14.5 billion board feet. A 3.6
percent drop is predicted for 2009.
Canadian imports, which represent more than 90 percent of the volume of
imported lumber, are expected to lose market share. Imports from north
of the border should total 13.1 billion board feet this year, then fall
3 percent in 2009.
Non-Canadian lumber imports, mostly from Europe and Latin America, have
also plummeted. Just 1.4 billion board feet is forecast to be imported
from non-Canadian destinations in 2008, compared to 3.2 billion board
feet shipped to the U.S. in 2005.
The WWPA forecast calls for housing markets and lumber demand to grow in
2010, but cautions that any recovery will be slow.
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. | 
