Timber and Home Construction Lifted by Housing

By Bill Esler | Posted: 10/03/2012 10:00AM

 

The housing recovery is driving investment into home building, with lumber and forest products firms the beneficiaries.

As numerous reports show housing is beginning to boom - the Wall St. Journal notes today that homebuilders PulteGroup, DH Horton and Lennar shares are up sharply (Pulte by 44%), while Weyerhaeuser, Plum Creek Timber and Potlatch all are gaining through sales, and in value to shareholders. (They are structured as real-estate investment trusts rather than manufacturing operations.)

Bloomberg News reported as early as August on the signs that the housing sales and construction recovery was driving profitability for forest products firms. That recovery was indicated by a mid-August spike in lumber futures traded at the CME Globex exchange in Chicago. (CME lumber futures contracts prices are posted live in real time at WoodworkingNetwork.com.)

Home building construction Lennar Corp.

Homebuilders' Earnings Turn Positive

Canada's West Fraser Timber Co. and Western Forest Products Inc. are among forest products firms experiencing five-year highs in sales, boosted by the U.S. housing rebound and by high Chinese demand. (It's said that China's yearly wood consumption is the equivalent of Canada's entire annual lumber output.)

For the wood products industries, it's tough not to have a positive takeaway.

We journalists rarely like unmitigated good news, relying as we do on that dynamic tension of potential doom to pique reader interest. 

Obviously there will be rising demand for raw materials, competition for labor, and the stress of working hard for long periods. But even that sounds good after what we've been through.

 

About the Author

Bill Esler, Woodworking Network, WMS

Bill Esler

Bill Esler, Editorial Director, Woodworking Network Bill is responsible for overall content at WoodworkingNetwork.com Woodworking Network magazine, and related newsletters. Bill also manages event programs for Woodworking Network Live conferences at the Woodworking Machinery & Supplies Expo in Toronto and Cabinets & Closets Expo. He developing audience engagement programs using custom digital printing, live lead-generating events, custom websites, and custom digital and print content. Read Bill Esler's woodworking blogs. He can be reached at besler@woodworkingnetwork.com or follow him on Google+.

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