Domestic and export sales remained slow in April, and hardwood business segments are showing more signs of stress - good for buyers but bad for sellers. 

Officially, the U.S. economy added 223,000 jobs in April and the unemployment rate fell to 5.4%.Poor GDP growth and business investment, however, suggest the official employment figures misrepresent the broader economy. New home starts remained slow in March while existing home sales reportedly jumped to the highest pace in 18 months. Q1 home prices were higher than year-ago levels in 85% of U.S. metropolitan areas.

In particular, low-grade markets are filling with supply—the combined effect of steady sawmill production, and lower demand for flooring-grade lumber, board road, crane mats and industrial timbers.

Lower oil prices forced the oil industry to lay off 100,000 workers and sharply reduce drilling, and somewhat higher oil prices won’t quickly reverse that trend. Pallet stock is now more readily available and crosstie production is rising.

First quarter exports were 6.5% - or 26 million board feet -  lower than in Q1 2014. Somewhat surprisingly, China's purchases of Red Oak were only down 2.9% from Q1 2014—the equivalent of 140 fewer containers.

New export orders remain slow, however, and buyers are pushing for lower prices. Though China is working to stimulate its economy, summer exports will miss expectations.