The Holiday Season is upon us, and businesses have slowed down somewhat, as expected at this time of year, to spend time with family and friends and to take a short rest. It has been a busy year, and this is a time to reflect on the positives and challenges faced, and to plan for the new year. Contacts and many organizations report being cautiously optimistic for this Q4 and for 2025. The U.S. Federal Reserve was pointing to more cuts for the end of 2024, and Canada appeared to be heading that way as well. Economists are forecasting moderate to strong economic growth in 2025, along with moderate to lower inflation. These forecasts are significant as lower borrowing costs may push investments in inventories and infrastructure. Lower borrowing costs could help home buying and homebuilding, driving an increased hardwood demand for materials to the flooring, cabinet, furniture, and moulding and millwork sectors.
As Ash demand was relatively low on markets, production of this species was kept to a minimum in many areas. As well, wet weather conditions for some areas disrupted logging activity. Developing green lumber was adequate for demand.
Demand was also down for Aspen reported contacts, therefore production was controlled. Supplies are not quite meeting demand.
The same was seen for Basswood with reduced production due to declining demand which created surplus inventories that were difficult to sell. However, these circumstances have improved, and supply and demand were reported to be flowing.
Birch demand was decent for the upper grades, aided by its lower prices compared to Hard and Soft Maple. Business was not performing as well for the Common and lower grades, but were consistent over the past month.
Hard Maple demand has been a steady stream throughout the year, and it was noted that many secondary manufacturers forecast an increase in demand for hardwood finished goods in 2025, as lower costs on loans could increase home buying and spending on indoor furnishings and fixtures on both sides of the border in the next several months. The Hard Maple upper grades are in great demand, as they are reported to be for most all species. It was noted that prices for upper grades had moved higher, while for the Common grades lower.
Whitewood species, of good color, increases its demand especially for top grades. Soft Maple markets are similar to Hard Maple, and some noted for Birch as well. Mills have ramped up production of Soft Maple, thus increasing supplies leading to price stability for upper grades and moderate variability prices for the Common grades.
Red Oak demand is not strong, as mills produced whitewoods over the summer months to avoid staining. Some sawmills have increased their Red Oak production heading into fall and buyers were also stocking up. Contacts noted that upper grades are the leading green and kiln-dried items, followed by Number 1 Common, then Number 2A and Number 3A. Prices are firming in some grades while moderating in others.
White Oak is selling well, with production gains, primarily reported in the Appalachian region, which are taking some supply strains off pricing.
In September national home sales increased marginally, following the Bank of Canada’s third interest rate cut. It was a third consecutive month of gains, as lower borrowing costs provided added incentive for buyers. But sales continued to be outpaced by new listings, leading to a surplus of properties on the market.
Looking at the market for the remainder of 2024, the Canadian Real Estate Association’s senior economist Shaun Cathcart noted, “With the pace of rate cuts now expected to be much faster than previously thought, it’s possible some buyers may choose to hold off on a purchase for now. This could further boost the rebound expected in 2025 at the expense of the last few months of this year.”
These figures are positive for the hardwood industry heading into the new year, as more rate cuts are predicted, which could be the incentive needed for those waiting to become home owners.
We wish everyone Happy Holidays and a safe, healthy, happy and prosperous New Year!
