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The Latest Key Prices from Madison's Canadian Lumber ReporterNEWS THIS WEEKTaller Wood Framed Buildings ; Madison’s Live Online Lumber Producer Listings ; Canadian Housing Starts ; Pacific Northwest Wood Exports ; Link to Lumber Price GraphsLink to News ArchivesUpdated on March 07, 2010 QUOTE OF THE WEEK: "This week was one of agony and ecstasy. All witnessed improvement in the weather but daffodil bouquets were of little help. Although sales began to perk up slightly, would-be customers looked to the US government for help that never came. Unemployment was a major worry but long awaited job creation programs fell flat. Small to medium sized businesses held off hiring spring labour, especially in construction, due to worries that passage of the Obama promoted health care legislation would cost them too much to stay in business. Higher taxes would also give a negative push to potential home buyers. "
All prices are in U.S. dollars per 1000 board feet unless otherwise noted. |
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Canada’s Mortgage and Housing Corp. Tuesday projected rising housing starts this year and next due to cheap borrowing costs and accelerating economic growth. Housing starts will rise to 171,250 units in 2010 and 175,150 units in 2011, from 149,081 in 2009, CMHC said on its web site. The forecast is higher than a November prediction of 164,900 units for 2010.
“Canadian housing markets will benefit from improving economic conditions and low mortgage rates,” Bob Dugan, chief economist for CMHC, said in the statement.
But it added that it expects prices to remain stable in 2010 around the Multiple Listing Service average reached in January this year of $328,537, as the new housing stock brings balance back to the market.
Canada Housing Market
CMHC said the strong pace of existing sales over the last three quarters of 2009 will not be sustained as pent-up demand is exhausted and financing costs rise later in 2010.
It said strong sales of existing homes combined with a limited supply of listings will continue to exert upward pressure in prices in the resale market. It estimates the gain could be 3.8 per cent in 2010 and 2.6 per cent in 2011.
CMHC chief economist Bob Dugan said recent federal government measures — such as requiring a larger down payment — would help moderate housing construction.
Dugan said in the beginning of 2009, a decline in the number of new listings for existing homes shifted the emphasis from a buyers’ to a sellers’ market and increased demand for new homes.
In 2009, softwood lumber exports from Oregon and Washington state jumped by 17.5 per cent from 2008, totaling 344.2 million board feet, according to data released February 26 by the US Forest Service’s Pacific Northwest Research Station.
While log exports fell about 10 per cent to 697.3 million board feet, the numbers still show a vast improvement from four years ago.
Analysts predict continuing improvement in the wood products market in 2010. The overseas trade could be a lifeline to a major Pacific Northwest industry battered by the US housing crisis and weak demand.
The biggest customer last year was Japan, which made up about half of log exports and about a third of lumber exports. China, South Korea and Canada were also big players in 2009.
US Coastal Wood Exports
Log exports have nearly seen a complete recovery. In 2009, the value of those exports was US$429.1 million in Oregon and Washington.
Some aspects of log exporting remained relatively stable during the recession.
The Columbia-Snake Customs District -- which includes the ports of Portland, Vancouver, Longview, Astoria and Coos Bay -- reported shipping 353.6 million board feet overseas, almost all to Japan. During 2000, the peak in the past decade, those ports shipped 399 million board feet.
While log exports fell slightly in 2009, researchers say they’ve likely hit bottom and are on the way up. “I think it is encouraging that there is some upward trend,” Robert Deal, a research forester with the Pacific Research Northwest Station told Oregon Business News. “We’re coming from a terrible place.”
Lumber shipments totaled $223.7 million in 2009, most of which left from the Seattle Customs District, which includes all ports in Washington with the exception of Longview.
Oregon lumber exports, a fraction of Washington’s, have been steadily declining since 1999. That’s likely due to federal logging bans which have limited supply, Deal said. In addition, much of Oregon’s lumber goes to California, a large market until the housing crisis.
Across the wood products industry, 2010 should likely see an uptick in business.
Most mills shut down for long stretches during the recession, whittling their inventories. Even without much demand, they’ll have to fire up to replenish their stocks.
