ScotiaBank says its Forest Products Index edged up in May 2014 and is slightly above a year earlier. Western Spruce-Pine-Fir lumber prices rebounded from a near-term low. Oriented Strand Board (OSB) rose $13 per thousand square feet.

The Forest Products Index edged up by 1.0% m/m and remains slightly above a year earlier (+2.1%). Western Spruce-Pine-Fir 2x4 lumber prices rebounded from a near-term low of US$338 per mfbm in April to US$342 in May.

OSB prices in the U.S. North Central region also advanced from US$210 per thousand sq. ft. to US$233. However, both lumber and OSB prices faded in the first half of June.

Buyers have been cautious about building inventories, given a somewhat disappointing rebound in U.S. housing starts in April/May 2014 (to 1.036 million units SAAR) following first-quarter weather-related weakness.

The Forest Products Index's lackluster pick-up partly reflects slow household formation linked to a high level of student debt and high unemployment among young adults, says ScotiaBank. A Gallup survey released earlier in 2014 indicates that 29% of U.S. adults under the age of 35 still live with their parents.