U.S. Iumber demand forecast for modest decline

A MILD slowdown in new home -{a.construction and repair and remodeling expenditures should reduce U.S. lumber demand next year, according to Western Wood Products Association's 2004 lumber forecast.

The Portland, Or.-based trade association said U.S. lumber consumption will decline l.\Vo to 55.7 billion bd. ft. in 2004. Despite the pull back, the volume used will be the third highest on record. Lumber demand in 2003 is expected to hit an all-time high of 56.7 billion bd. ft.

The two largest lumber use markets-new home construction and repair and remodeling-will account for most of the decline in2004.

be slower in 2004, we foresee another year of strong demand for western lumber products.

Higher interest rates are expected to slow home construction, reducing housing starts slightly to 1.69 million units. The decline will reduce the volume of lumber used in the segment by 3.67o to 22.4 billion bd. ft. next year. Repair and remodeling usage is anticipated to decline 3.3Vo to 17.7 billion bd. ft.

"The housing sector has been a bright spot of the U.S. economy the past few years, fueling unprecedented demand for lumber products," according to WWPA president Michael O'Halloran. "It's clear that wood remains the top choice for building and remodelins homes for American families. While activity will be slower in 2O04, we foresee another year of strong demand for western lumber products."

In step with lower consumption, U.S. lumber production is forecast to ease by l.4Vo to 35.7 billion bd. ft. Western production will be down roughly l.4Vo in 2004 while Southern production will be off | .l%o.

Although availability of some species may tighten, western woods specialist Universal Building Specialties, Auburndale, Fl., anticipates more than making up the volume with other woods or materials. "Western red cedar is an example of a species that appears tight, and getting tighter, with higher pricing and longer lead times being the end result," said

Jim VanPelt.

Nevertheless, he said, "UBS's business, traditionally a business of higher graded western specialty softwoods, is expected to be up from21%o to 3OVo rn 2004 over 2003. With over half of UBS's 2004 growth coming from expansion and increased market share, much will come from an improved economy and better market consumption than 2003. "

Lumber imports to the U.S. are expected to decrease to nearly 21 blllion bd. ft. in 2004, according to WWPA. While shipments from Canada will be down l.1%o to 19 billion bd. ft., non-Canadian imports are expected torise 5Vo to 1.87 billion bd. ft., spurred by higher volumes from European lumber mills.