Thursday, March 3, 2011

China Continues to Impact Canada's Lumber Industry

Latest news reports in 2011 continue to show a positive trend for the Canadian forest industry.

Shipments to China and Japan were up in 2010 from the year before, and demand continues to be strong in 2011. Many BC forest companies have reported a profit in the latest quarter. There are a number of sawmills operating in BC right now solely because of demand from China.

There are also more indications that China will be using more lumber for constructing housing than in the past (when mostly concrete and steel were used). Housing starts over the next three years are going to be in the 6 million unit range.

Given that only a minor amount of construction in China uses wood right now, there is a lot of room for growth. Canada recently became the number one supplier of lumber to China, and China recently became the second largest economy in the world (behind the US and ahead of Japan).

When you think that the increased harvest of dead beetle-attacked pine in BC is in its closing days, demand from China keeps increasing by double digit %, and the US is expected to resume its demand at some point, the next few years could be busy times in the Canadian forest industry. If harvest rates in BC come close to their annual allowable amounts, it will have a trickle down effect for jobs and towns in the areas of logging, hauling, planning, engineering, and silviculture.

A couple years ago it seemed like the forest industry couldn't sink any lower. Today, the future looks bright.

See the article below in Canadian Business: