stays at record pace Western mills stay busy

A MERICA'S appetite for lumber fl,products continues to grow, with lumber demand in 1999 expected to reach an all-time high fbr the second consecutive year. Demand is forecast to decline modestly in 2000, but remain at historic high volumes.

Western Wood Products Association. in its semi-annual forecast of lumber supply and demand, estimates U.S. lumber demand will total a record 53.3 billion bd. ft. in 1999, an increase ot2.2Vo from 1998.

Unexpected gains in housing construction and continued growth in the economy will contribute to the record lumber demand. WWPA expects housing starts to finish the year at 1.65 million, the best year for housing since 1986. Lumber use for repair and remodeling is also forecast to rise l.5Vo. Together, residential construction and repair/remodeling account for two-thirds of the lumber use in the country.

Looking to next year, WWPA is forecasting lumber demand to slip by 2Vo to 52.3 billion bd. ft. While lower, the demand in 2000 would be the second highest in history. Housing starts are expected to fall 5.3Vo to 1.56 million, as WWPA anticipates higher interest rates and slower economic growth in 2000.

Western lumber production should improve to nearly 17 billion bd. ft. in 1999, up 3Vo from the previous year.

Lumberdemand in 1999 is expected to reach an all-time high for the second consecutive year.

Output at western sawmills should fall a modest l.8Vo to 16.66 billion bd. ft. next year.

Lumber imports are expected to top a record 18.96 billion bd. ft. in 1999, with most of the volume from Canada. In 2000, WWPA estimates a l.l7o decline in lumber imports.

U.S. lumber exports should recov- er in 1999 to 1.35 billion ft., following a sharp drop in 1998 caused by economic problems in Japan and Asia. In line with an expected economic recovery around the world, exports in 2000 should rise 4.3Vo.

In the West, lower lumber prices and more competition in the market pushed 1998 regional lumber production slightly lower, according to final totals published by Western Wood Products Association. WWPA released final industry figures for 1998 following its annual survey of more than 300 mills in the 12 western states and Alaska.

Lumber production in the West totaled 16.49 billion bd. ft. in 1998, down lVo from 1997 volumes. It was the first time since 1995 that annual production was lower than the previous year.

The decline came despite an increase in U.S. lumber demand, which topped a record 52.21 billion bd. ft. in 1998. Poor export markets for lumber-particularly in Japan(please turn to next page)

Western Wood Production

(continued frotn previous page) kept more lumber in the U.S., adding to domestic supplies. Also, lumber imports, mostly from Canada. increased 3.8Vo to 18.69 billion bd. ft., an all-time high.

The increase in supplies put downward pressure on lumber prices. With some product prices declining by as much as 20Vo from 1997 levels, many western mills faced difficulties competing for customers in 1998.

Oregon remained the top lumber-producing state not only in the West. but also in the entire nation. with sawmills cutting 5.49 billion bd. ft. at an estimated wholesale value of $1.91 billion.

Washington was the No. 2 producing state with 3.91 billion bd. ft. valued at $1.37 billion. Coming in third was Calitbrnia with 3.19 billion bd. ft. valued at $ 1.4 billion. Together, the three states accounted for more than threefourths of the region's lumber production.

Production and estimated wholesale values for other Western states were:

. Idaho, l.9l billion bd. ft., $714 million:

Montana, 1.3 billion bd. ft., $474 million;

. Wyoming, 214 million bd. ft., $80.1 million;

. South Dakota, 154 million bd. ft., $53.6 million;

Colorado, 88 million bd. ft., $29 million;

. New Mexico, 87 million bd. ft.. $30.2 million;

Arizona, 78 million bd. ft., $27 million;

. Utah, 67 million bd. ft., $22.7 million;

Given the small volume, totals for Nevada are included with California.

For the first time, WWPA collected lumber production statistics for Alaska. According to the survey, Alaskan lumber production totaled 78.9 million bd. ft. in 1998.