Spike in l-Joists Helps Wood Production Climb

The small but positive uptick in the economy and residential construction closed 2012 on an optimistic note for the first time since the recession began, and that slow-but-steady growth is expected to continue through 2013.

With indicators pointing to rising housing starts through the year and into 2014, APA-The Engineered Wood Association predicts a second straight year of growth in all four of the wood product sectors it represents. led by growth in I-joists.

"Last year saw across-the-board increases in structural panels, I-joists, glulam, and LVL. ln 2013, not only will that trend continue, but at a slightly faster pace in most cases," said Craig Adair, APA's market research director. "Residential construction will drive much of that growth, with pent-up demand for housing, moderately rising home prices, and growing consumer confidence having the most influence."

Housing is beginning to lead the economy and is expected to provide an economic catalyst for years to come. The residential market is sain- ing strength from a very low bottom, and interest rates are still low. While housing is not immune from potential tax increases and government spending cuts, momentum is favorable for a healthy increase in starts.

APA is forecasting single-family housing starts to reach 665,000, a 247o gain, as homeowners take a positive view toward purchasing a home, the job market improves, and home prices firm up in many cities. Multifamily starts are expected to improve 357o to 330,000 units.

The remodeling market is also showing small signs of life, although the outlook is brighter into the second half of 2013 and in years following.

The NAHB's Remodeling Market Index is above 50 for the first time since 2005, meaning that more remodelers expect business to be higher or better in the future. The Harvard Joint Center for Housing Studies predicts repair and remodeling expenditures to reach2O07 levels, around $145 billion. a dramatic improvement over 2008-2012 levels.

Non-residential's mild 3Vo uptick in starts in 2012 is expected to be repeated in 2013. School construction and healthcare will lead in total square footage, although the education sector will experience a small decline. Collectively, non-residential starts are expected to recover to more than I billion sq. ft. within the next four years.

The industrial market will see only modest growth in 2013 due to a number of factors, from government budget cuts that impact manufacturing to the millwork industry's dependence on remodeling, as well as non-residential construction. Overall, manufacturing is expected to grow about 2Vo this year, down from 47o in 2O12. Improvement to 57o growth is anticipatedin2014.

Finally, indicators point to U.S. structural panel manufacturers exporting about the same quantity of material in 2013 as in2Ol2.

Wood products demand is expected to accelerate as rapid housing growth is followed by renewed repair and remodeling energy, an upturn in the nonresidential construction cycle, and industrial demand that increases with consumer spending and higher

GDP growth.

Domestic (U.S. and Canada) production of OSB and plywood is expected to reach 30.5 billion sq. ft. in 2O13, a l07o rise over 2012.

Glulam is predicted to see a l07o increase over 2012, reaching 248 million bd. ft. The growth is due entirely to housing, with little support from non-residential.

Growth in the I-joist market is forecast around l17o in 2013 to 65 I million linear ft., slightly slower than 2012's 22Vo increase. Most of the gains will come from housing, with raised-floor construction continuing to provide a notable boost.

Increased housing starts also will drive demand for LVL, the majority of which is used for beams, headers and rimboard. LVL production should reach 54.9 million cubic ft. in 2013, a l0% growth over 2O12.

For more details, APA's latest Yearbook, containing historical data and a look at 2013, is $250 for nonmembers from www.apawood.org.

CPA Pleads Guilty to Fraud

A certified public accountant in Kalispell, Mt., has pleaded guilty in a wire fraud case involving RBM Lumber Co.. Missoula. Mt.

According to federal court records, 66-year-old Jesse Wall approached RBM in 2008 and offered to invest $350,000 of the company's money in ways that would produce a higher rate of return than a bank. Instead, Wall used the money for his own struggling business. Nevada-based Milestone Innovations.

In February 2011, when RBM asked Wall to return the monev. it was told that the money was tied up in a real estate investment. In June, he did return $190,000 to RBM and hoped to sell his house and repay the rest.

When FBI agents interviewed Wall in December 2011, he admitted that "perhaps he did say something misleading to them" to induce RBM to invest with him.

He was indicted a year later and now faces up to 20 years in prison. a $250,000 fine, and three years of supervised release. Sentencing is set for July 12.

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