Tacoma, Wash. - For the first time in several years, all of the major end-use markets for wood products are expected to move in concert and increase this year. Housing, the largest market for many products, is expected to increase 10 percent this year when U.S. and Canadian starts are combined. Details of the new forecast for APA product category groups and major end-use markets were published earlier this month.
“There is a little more life to engineered wood demand this year. Last year, we were just treading water,” said Craig Adair, APA’s Market Research Director. “This year, we’re expecting demand to pick up from 4 percent to 11 percent depending on the product.”
Although the Great Recession in the U.S. ended in mid-2009, the recovery has been uneven, and only now is the U.S. economy showing signs of sustainable growth. Adair noted that singlefamily housing is still plagued with several obstacles, including banks that are reluctant to lend and more foreclosures on the way. Single-family construction is expected to improve in 2012, but it should have a more meaningful recovery in 2013.
“It may not be a lack of consumer demand that’s holding housing back; it’s more likely a financial system that currently doesn’t freely accommodate residential mortgages, and it could take years to repair and reorganize the system,” Adair said. Meanwhile, the demand for rental housing is so great that apartment construction has picked up along with a wave of investment in existing single-family rental housing.
Nonresidential construction is showing signs of a turnaround in 2012. Remodeling and industrial markets are expected to increase again in 2012. Exports to Asia, Mexico and the Caribbean should continue to improve.
The table below paints the picture for U.S. and Canadian housing starts in 2012 compared to last year.
Housing Starts in the U.S. and Canada*
*Thousands of starts
Demand and production of North American structural panels and engineered wood products are expected to increase in 2012. Structural panels are expected to increase 7 percent in 2012 as all end-use markets demand more volume. Overall, structural panel production is forecast at 28.0 BSF in 2012.
The outlook for glulam timber is better in 2012 than in 2011 because both residential and nonresidential construction are forecast to increase. North American production is forecast at 213 MMBF in 2012, a 5 percent increase from 2011.
I-joist market share is forecast to increase modestly in 2012 to 53 percent of raised floors. As the housing market improves, I-joist market share is expected to grow steadily. The forecast for 2012 is an 11 percent increase to 509 MMLF. In the Structural Composite Lumber family, laminated veneer lumber (LVL) production is expected to follow the demand for beams and headers, rim boards and I-joist flanges. Production is forecast to increase 4 percent in 2012 to 43.4 MMFT3.
APA’s five-year Market Outlook is available through APA’s Member Only website. APA’s Yearbook, which contains historical data and a look at 2012, is available to non-members for $250 through www.apawood.org.