By: Business Vancouver
This is not the forestry recovery that was hoped for. B.C.’s lumber production has long been considered a sector that would contribute positively and significantly to provincial economic growth in the post-recession period with U.S. economic growth and increased home building the key triggers for higher lumber export demand.
Despite U.S. housing starts rebounding to more than one million units in 2014 from about 609,000 in 2011, and grinding out year-to-date growth of 6% this year, B.C. lumber production remains in a disappointing holding pattern.
Monthly production is trundling along at a pace that is not all that different from the average level observed since 2012. In April, monthly softwood lumber production was up 1.7% from a year ago to 2.67 million dry cubic metres, pushing year-to-date production growth to a lacklustre 1.5%.
Part of this year’s production growth reflects increased capacity due to the restart of rebuilt mills in Prince George and Burns Lake. This aligns with dollar-volume manufacturing growth of sawmill and wood preservation products of 3.7% over the same period with the differential owing in part to mild price growth over the period.
Lumber shipment gains have lagged behind growth in broader wood-product manufacturing activity of about 8% year-to-date, which includes products like veneer, plywood, engineered wood and pellets.
While a seemingly contradictory (and rosier) picture emerges with the growth in year-to-date physical exports of softwood lumber to international markets of 13% through April, the outsized gain reflects base-year effects.