Tuesday, March 4, 2008

Hard times in BC Forestry

Global TV did a segment on tough times in the BC forest industry last night. Analysts are saying these are some of the toughest times in two decades for forestry. Some of the contributing factors are:

- high Canadian dollar vs US dollar

- low lumber prices

- US lumber agreement kicking in 15% duty

- slumping US housing construction

- high fuel prices

It almost seems like everything that goes against the forest industry is happening at the same time, with no positives. Many mills in the province are facing shutdowns or aren't operating. For example, six out of eight mills in Mackenzie aren't in operation right now.

Also consider, two years ago lumber prices were around $400 US, and the Canadian dollar was worth about 80 cents US. Today, lumber prices are around $210 US, and the Canadian dollar is just over par. I can't think of any other industry that has been hit so hard in the price of it's product.

Analysts expect the downturn to last at least a year, but it's hard to say how long lumber prices will stay low, and when the US housing market will turn.

If the industry does turn around, it also might have a harder time finding workers.

A new report out today warns of Canada's aging workforce.

The workforce in Canada is aging significantly, prompting concern from analysts about the impending threat of labour shortages across the country.

For the first time ever, there are just as many workers in Canada over 40 as there are under 40.

The 2006 Census findings, released Tuesday by Statistics Canada, show 15.3 per cent of Canadian workers are 55 or older and nearing retirement.

link to article:

A final factor to consider is that we are in the midst of a pine beetle outbreak that will kill most of BC's lodgepole pine within the next few years. If lumber prices stay low and mills shut down, then a lot of the pine that is dead or dying will remain in the woods and will be lost to fire or rot. It's a shame, because this pine could have provided jobs and wood products, and the logged areas would have been managed to ensure new forests were established.