HARDWOOD MARKETS MATTER

Hardwood Markets Matter and it is important for NHLA to share market details of the entire Hardwood Industry. We appreciate the support of allied associations and publishers in gathering and sharing this important market information that can help you understand the complete hardwood industry picture. www.hardwoodreview.com

For the last decade, U.S. hardwood lumber exporters put much of their efforts into Asia, which made sense because more than half of all U.S. exports went to the region. However, beginning with the U.S-China trade war in mid-2018—and furthered by COVID-related supply chain snarls—wood products manufacturing, especially furniture, has been undergoing a global shift. One of the results has been rather explosive growth in hardwood lumber shipments to Mexico. Mexican manufacturers whose primary market—and primary source of raw materials—is the U.S. hold a decided geographical (shipping) advantage over Asian and other global manufacturers. In addition, labor and energy are less expensive in Mexico than in China, and wood products manufacturers are an intensive users of both. As a result, even Chinese companies have moved some of their production to Mexico. Accordingly, Mexico’s share of total U.S. wooden furniture imports grew from 4% in 2018 to 7% in 2022, and the volume of wood mouldings arriving from Mexico more than doubled during the same period.

This manufacturing shift, coupled with the post-COVID rebound in consumer demand, pushed U.S. hardwood lumber exports to Mexico up 37% in 2021, to a new annual high of 155 million board feet (MMBF).

U.S. Hardwood Lumber Exports to Mexico

Exports were stronger still in 2022, with volumes through October already surpassing 2021’s 12-month total. Mexico accounted for 7.5% of all U.S. hardwood lumber exports in 2017, but 12.4% in 2022. That 4.9-percentage point increase equated to 73 MMBF more hardwood lumber shipped in 2022 than if Mexico’s share had remained at 7.5%. With the exception of Hickory and Cherry, U.S. shipments of every hardwood lumber species to Mexico in 2022 were outpacing 2020 and 2021 volumes through October. Additionally, Mexico was the only Top 5 global market to which shipments continued to hold strong through October—and at near-record levels—making it the most resilient major market in a sea of softening global economies.

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