Lumber Inventories Low, Some Species in Tight Supply

By Andy Johnson | Posted: 01/18/2013 4:50PM

 

The continuing recovery of the U.S. economy has fueled increased optimism in the U.S. hardwood industry. The latest forecasts estimate U.S. GDP growth above 3% in 2013 with inflation well contained. Economic activity around the world is also steady to rising. Chinese growth in Q4 looks to have broken out after 7 slower quarters, and European counties have taken steps to get their economies growing again. Lumber pricing and sales

Hardwood sawmills have kept production steady, but wet weather in the North and South has hurt logging over the last few weeks. Most mills do have logs, but some will have to reduce operations in late Feb or Mar. Domestic lumber consumption continues to increase, with strong demand from flooring plants and rising demand from the kitchen cabinet sector. Privately owned building permit authorizations rose to an annualized rate of 899,000 in Nov—27% above last Nov’s pace.

Lumber prices should continue to firm on rising domestic and export demand as well as lagging production. Lumber inventories are lower than normal, with some species already in tight supply. China will set the pace in 2013, but 11 other Top 20 markets posted double-digit purchasing increases in 2012. Imports of lumber, components, flooring, cabinets and furniture will also grow significantly in 2013, in tandem with general economic and housing sector growth.

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