Lumber finally rises from the forest floor
A stronger housing market and growing overseas demand have pushed prices to an 8-year high, ending the industry's long recession.
Another sign that, knock wood, the economy is recovering.
Lumber prices hit an eight-year high last week, thanks in large part to the U.S. housing market thawing out after a long deep freeze and rising overseas demand.
"The last few years have been a slow recovery from the recession for wood products," Phil Tedder, a forestry consultant at Resource Economics, told the Los Angeles Times. "The main consumer was new housing, and that obviously wasn't very good. But now things are picking up."
California's long-established timber industry is also hauling itself off the forest floor. According to the Times, sawmills shut down by the recession have reopened, and trucking companies that deliver cut wood out of state are seeing business improve. The newspaper also notes lumber prices have jumped 40% just in the past year's time.
Also, China's seemingly endless hunger for raw materials has extended to American timber. The U.S. Forest Service says log exports from Alaska, Washington, Oregon and Northern California increased about 9% in the third quarter of 2012 -- with 62% of those West Coast log exports going to China.
In a report from ABC News, timber industry newsletter Random Lengths said the composite price for the framing lumber used in home construction was up last month to $415 per 1,000 board feet, compared to $284 a year ago. Plywood and paneling prices are up sharply as well.
Rising consumer demand is also helping. Home Depot (HD) recently announced its fourth-quarter 2012 sales rose 13.9% compared to the same period in 2011. Chairman and CEO Frank Blake attributed those strong numbers to "a continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy."
But while the timber industry may be finally catching a break, it's also worried about falling behind.
"Supply has been chasing demand, but has not caught up," Jon Anderson, president and publisher of Random Lengths, told ABC News. "Producers, because of the depth and length of the recession, have been reluctant to add shifts or increase production. They've held off re-opening mothballed facilities."
However, he says,"you're starting to see mills increase production or come back online."
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[BRIEFING.COM] Equities ended on their lows with the S&P 500 down 1.4%.
The S&P entered today's session with a week-to-date gain of 1.5% as investors expected reassuring words from today's Federal Open Market Committee Statement.
Stocks traded with slim losses until this afternoon's FOMC Statement and subsequent comments from Chairman Bernanke sent equities and Treasuries to their lows while also providing a significant boost to the dollar.
Today's Statement was ... More
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