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Housing to Continue to Drive Lumber Demand Down
Slower housing markets will continue to take some of the pressure off of demand for lumber, according to the Western Wood Products Association in its forecast for the coming year.
The association estimates that lumber demand last year fell 3.2% to 61.9 billion board feet, down from an all-time high of 63.9 billion board feet in 2005. Demand for lumber is expected to slide further this year, by 7.2% to 57.1 billion board feet.
A slowdown in housing activity from the blisteringly hot levels of the recent boom years is the key reason for the decline in lumber demand, according to the association, and it assumes that housing starts will decline 10% in 2007 to 1.69 million, following a 9% decline last year.
A 6% decline in the volume of lumber used for residential repairs and remodeling is also in this year’s forecast, following a 2.6% decline in 2006.
“While homes prices will still fall in some areas, we think that housing starts and home sales are nearing a sustainable rate,” said Kevin Binam, the association’s chief economist. “But construction is going to be lower than we’ve seen in the past few years and that will mean less demand for lumber.”
Lumber imports are forecast to decline with the slide in lumber demand, although Canadian shipments are expected to fare better than those from other countries. Canadian imports fell by an estimated 1.4% in 2006 and are headed for a further 6.1% drop this year, slipping below 20 billion board feet for the first time in three years.
 Want to Know the Long-Term Forecast Through 2015?
Find out in HousingEconomics.com’s Long-Term Forecast.
HousingEconomics.com includes downloadable Excel tables featuring the housing starts forecast, GDP, demographics and more.
To learn more, visit www.housingeconomics.com.
 NAHB Kit Gives Builders Back-to-Basics Tips in Changing Market
With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
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