U.S. lumber demand forecast for modest decline

A MILD slowdown in new home ll,construction and repair and remodeling expenditures should reduce U.S. lumber demand next year, according to Westem Wood Products Association's 2004 lumber forecast.

The Portland, Or.-based trade association said U.S. lumber consumption will decline l.8%o to 55.7 billion bd. ft. in 2004. Despite the pull back, the volume used will be the third highest on record. Lumber demand in 2003 is expected to hit an all-time high of 56.7 billion bd. ft.

Consequently, lumber prices have been especially strong the last few months. "I haven't seen anything like this particular spike in 25 years," said be slower in 2004, we foresee another year of strong demand for western lumber products.

The two largest lumber use markets-new home construction and repair and remodeling-will account for most of the decline in2OO4.

Higher interest rates are expected to slow home construction, reducing housing starts slightly to 1.69 million units. The decline will reduce the volume of lumber used in the segment by 3.6Vo to 22.4 billion bd. ft. next year. Repair and remodeling usage is anticipated to decline 3.3Vo to 17.7 billion bd. ft.

"The housing sector has been a bright spot of the U.S. economy the past few years, fueling unprecedented demand for lumber products," according to WWPA president Michael O'Halloran. "It's clear that wood remains the top choice for building and remodeling homes for American families. While activity will be slower in 2004, we foresee another year of strons demand for western lumber

products."

In step with lower consumption, U.S. lumber production is forecast to ease by I.4Vo to 35.7 billion bd. ft. Western production will be down roughly l.4Vo in 2004 while Southern production will be off l.l%o.

Lumber imports to the U.S. are expected to decrease to nearly 2l blllion bd. ft. in 2004, according to WWPA. While shipments from Canada will be down l.'|Vo to 19 billion bd. ft., non-Canadian imports are expected to rise 5Vo to 1.87 billion bd. ft., spurred by higher volumes from European lumber mills.