North American Lumber Market Growth
Due to higher end-use market activity, the number of North American mills is expected to grow steadily in 2019 and the U.S. softwood lumber consumption is expected to reach 55 billion bf in 2020.
- The Canadian and U.S. divisions of FEA are "forecasting a pleasant surprise in lumber pricing in 2019".
- The U.S. softwood lumber consumption is projected to reach 52 billion bf in 2019.
- Canadian consumption is projected to grow by 2.5% in 2019.
- Due to higher end-use market activity, the number of North American mills is expected to grow steadily in 2019.
- Most wood suppliers expect a good buying season in the 2019 spring season. N.C.- based consultant — Matt Layman — in his Lumber Market Forecast believes that lumber demand will be very strong in quarters 2 & 3 compared to a noisy and volatile first quarter.
- Lumber prices that are expected to rise in the spring of this year are being hit by bad weather and a decline in home building. Bad weather in key markets has limited building and renovation orders. For example, Nashville's hot market was disturbed by rainfall, Seattle was disturbed by snowfall, Alabama and Memphis have been soggy.
- As of August 09, 2019, the price of lumber is $359.50.
- The U.S. softwood lumber consumption is expected to reach 55 billion bf in 2020.
- Canadian consumption is expected to grow at 3.3% in 2020.
- The future price of lumber is predicted to be $410.992 (14.323%) by August 2020.
Market Growth For Supply
- Lumber production in the U.S. will increase by 7%.
- Canada will enjoy moderate growth as Canadian consumption is expected to grow slowly at 2.5% in 2019 and 3.3% in 2020.
- Supply in the U.S. is expected to gain up to 4.5% and just a little in Canada.
- The U.S. south lumber output will continue to expand, from 19 billion bf in 2018 to 21.5 billion bf by 2020.
Market Growth For Demand.
- The U.S. residential housing construction market is sluggish and remains at near recession levels.
- Demand for U.S. domestic softwood lumber is expected to increase well into 2020 "as the U.S. economic recovery (and particularly housing) builds momentum."
- Housing starts are expected to have an upward momentum over the next few years. It is predicted to grow at an average of 1.32 million units in 2019 and 1.4 million-plus in 2020 (versus 1.26 million in 2018). Based on these, lumber consumption should increase in 2019.
- Canadian forest industries expect the U.S. softwood consumption to reach 52 BBF in 2019 and 55 BBF in 2020.
Expected Growth Drivers of this Market.
- Based on slowly improving housing starts and strong gains in repair and remodeling (R&R), lumber consumption should increase in 2019.
- Increasing housing starts in Canada rapid urbanization and growth in construction activities are expected to drive the growth of the lumber market from 2018 to 2022. Increasing consumer spend on furniture, repair, and remodel spending is also expected to drive the growth of the lumber market from 2018 to 2022.
Potential Barriers to the Growth of this Market
- High home prices are limiting demand for new houses in Canada and this is expected to slow the percentage growth in 2019 and 2020.
- The trade disputes between Canada and the U.S. poses a major challenge for the North American lumber market.
- Labor shortages and higher lumber costs are potential barriers to the growth of the lumber market from 2018 to 2022.
- "The reluctance of dealers and mills to oversupply the market, logging, and transportation infrastructure attrition and transportation disruptions, a capacity that exceeds consumption, and offshore trade".
- Mexico was not mentioned as a key player in any of the North American lumber market information for 2019 and 2020 found. The reason might be because only about 30% of all forests are exploited as its forestry policy is designed to protect and renew. Hence, "wood production costs are 35–40% higher than the world average" and is unable to meet its own supply needs. Mexico's import of wood products exceeds its exports by $2.46 billion.