Structural Panel Output Sets Record

U.S. and Canadian production of structural wood panels reached a record 40.34 billion sq. ft. (3/8" basis) in 2N2, tp 3.5Vo from 2001, according to APA-The Engineered Wood Association. The old record of 40.33 billion ft. was set in 2000.

While the weak economy limited demand in the nonresidential construction market, industry production for the year was able to set the new record largely because of the surprisingly strong housing market and strengthening demand in the remodeling and industrial markets. Residential con- struction accounts for approximately half of total market demand for structural panels. Housing starts in 2002 totaled 1.7 million, a l6-year high.

APA's latest forecast, issued last fall, is for North American production to rise by another 400 million ft. to 40.7 billion in 2003, based on expectations that housing starts will remain in the 1.6 million range and economic recovery will spur additional demand in the industrial and nonresidential construction markets. Obvious wild cards include the ongoing threat of terrorist attacks and the possibility of war

Manufacturers and Distributors of: with Iraq. The latter, if it occurs, should not be a major economic factor provided hostilities are successfully and quickly concluded.

Over the longer term, the most recent forecast is for panel production to edge slowly upward, reaching 42.5 billion ft. over the next five years. Demand for housing is expected to continue strong. with starts remaining close to 1.6 million units annually. A long-standing trend toward larger homes, however, could level off, thereby mitigating a major historical structural wood panel demand factor.

U.S. and Canadian OSB production is expected to total 23.5 billion ft. in 2003, or nearly 58Vo of total structural wood panel output. That percentage should continue rising over the next five years, but at a slower rate as OSB sheathing markets become increasingly saturated.

Gall the experts: r Randy Jensen r Jim Duckworth r Gordon Watts r Tom Butterfield

Quolity Wesfern

Plywood demand has been limited over the past several months by lack of capital investment in industrial markets, where plywood manufacturers have become increasingly adept at carving out specialty and niche markets. Although the prospects for continued improvement in those markets are good, total plywood production is expected to remain in the l6-17 billion sq. ft. range through 2005. In addition to competition from OSB, the plywood industry has lost nearly all of its European markets to foreign producers and now also faces rising plywood and OSB imports here at home.

Total softwood plywood and OSB imports into the U.S. and Canada last year totaled 700 million sq. ft., up almost 807o from the year before and 260 percent from 2000. About 607o of that imported volume was plywood.

Exports, meanwhile, continued to decline in 2002. The two countries' combined plywood and OSB exports (excluding again trans-border shipments) felI20Vo to 703 million ft.

Engineered wood framing products now meet about 5Vo of North American structural lumber demand. That share is expected to continue rising, albeit slowly, reaching 67o by 2006.

Glulam production, aided in the coming year by an expected rebound in nonresidential construction, is forecast to rise about 27o to 345 million bd. ft. in 2003. Production of I-joists, which now command about 43Vo of the raised floor market, is expected to exceed I billion linear ft. for the first time, up from 981 million ft. in 2002. And LVL output is forecast to rise 1Vo to 66 million cu. ft.

APA Scales Back Operations

APA-The Engineered Wood Association is closing its international offices in Japan, Mexico and the United Kingdom, effective March 10, and making other organizational changes due to market conditions and budget constraints imposed by membership and dues income declines.

Recent APA member mill closures and withdrawals will reduce the association's income by about l07o this year. The cost-cutting measures, including both staff and program reductions, are "designed to enable us