US Wood Furniture Sales To Rise, Tight Lumber Supply

The next few quarters will bring better business and higher lumber prices, but cost containment will present challenges for the forest products industry.US Wood Furniture Sales To Rise, Tight Lumber Supply

Profitability will remain elusive for sawmills as log supplies stay tight and prices continue to bid higher. Plus, challenges posed by implementation of the Affordable Care Act (Obamacare) vexes some business owners, who say until its full impacts and implications become available, they will keep hiring and expansion plans on ice.

Hardwood lumber supply will remain tight as production recoveries lag demand improvements, which will be driven in 2013 both by Asian markets and domestic housing improvements. With seasonally adjusted existing home sales pacing at 4.92 million units in Jan, housing supply has tightened to just 4.2 months, the lowest since April 2005, according to the National Assoc. of Realtors. 

Fewer foreclosed homes are for sale, as well, which should help drive the recovery. Bank of America predicts home prices will climb 8 percent in 2013. Improving consumer confidence, stable to slightly higher home values and increased mortgage refinancing will gradually nudge up domestic wood furniture sales through year-end. Lumber exports in January 2013 set an all-time January record of 113 million board feet, more than double the low point in Jan 2009.

US Wood Furniture Sales To Rise, Tight Lumber Supply 


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