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Better days ahead for Alberta’s lumber industry
October 30, 2012
CALGARY, AB, Oct. 30,2012/ Troy Media/ – Prices for lumber are currently some of the strongest the industry has enjoyed in almost three years. You have to go all the way back to the pre-recession years of 2004 and 2005 to find lumber prices consistently this solid.
In October 2012, the composite price of lumber in North America was US$321 per thousand board feet. That price is derived from a weighted average of 15 key framing lumber prices, as compiled by Random Lengths, a forest industry data provider.
The reason why prices had been so soft over the past few years was the nose-dive performed by the U.S. housing market after 2005. With new home construction falling from over 2.1 million units in that year to a mere 500,000 in 2008, the demand for framing lumber in North America tanked.
The slow but steady recovery currently underway in America’s housing market is credited with the stronger prices today. All of this spells relief for Alberta lumber mills.
Over the last decade or so, Canadian forest product producers have been hammered by a series of negative events: mountain pine beetles, a high Canadian dollar, and softwood lumber disputes with the United States, to name a few.
As a result, much of the Canadian industry has been rationalized (that is, older, less efficient mills have been shuttered). Today, remaining mills in Alberta are generally new and extremely efficient. And now with lumber prices on the rise, they’re ready for some better days ahead.
| ATB Financial
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