The usual slowdown in business was felt as the summer construction break took effect at the end of July. Also, the industry is seeing a slowdown in demand for Hardwood lumber, products and finished goods. There are concerns on lumber supplies as the pulp and paper industry is seeing a slowdown in their production as well, which makes it harder for those selling pulpwood, chips and sawdust. This may have an impact on lumber supplies to businesses who are further down the supply chain, like Hardwood lumber and finished goods manufacturers. Market conditions were reported to be unfavorable during late spring and into early summer for most species and grades.
The regionally important Hard Maple was noted as down for production as most markets, especially the wood component and cabinet manufacturing sectors, purchased much less Hard Maple in the past two years. Hard Maple lumber production was also down, but not as much as its usage. Prices have thus declined.
Soft Maple sellers are struggling to find customers. Wood components, case goods, cabinet and moulding producers have been very conservative in their purchases due to uncertainty of finished goods sales moving forward in the year. Prices are also reduced for this species.
Sales of White Oak, however, appears to be doing well noted contacts, especially to residential and truck trailer flooring plants. Some say that these companies are starting to reach their capacity of White Oak for their needs, however. Sawmills reported having ample orders for developing production and prices are noted as stable.
Red Oak domestic and U.S. border states’ markets have seen little change over the past few months. Flooring manufacturers are purchasing green No. 2A & 3A and quantities of No. 1 Common, while Red Oak consumption remains low in most other sectors. Chinese demand continues to go down for kiln-dried stocks.
Availability of timber and logs for Ash are on the decline even though sawmills are selling developing green production. It is selling well like White Oak. Demand for kiln-dried Ash is steady but limited on domestic markets, and shipments to the Far East have slowed compared to earlier this year, and prices being steady.
Cherry sales are hard to come by. Exporters noted that established Cherry customers in China are still providing some business, but prices are pressured with lower volumes than late last year and earlier this year. Demand on the domestic market is weak.
Basswood demand has dipped slightly this year as inventories were built up when production was at a higher pace last year. Homebuilders are also buying less fixtures and fittings as construction has slowed. There is also competition from imported products taking up market share of certain finished goods.
Green Hickory is moving at a fair pace, due to solid demand from the residential wood flooring sector with prices steady. Kiln-dried Hickory sales are reported as sluggish, with little activity in export markets. Supplies are meeting and, in some cases, surpassing demand.
According to Canada Mortgage and Housing Corporation (CMHC), the stand-alone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada increased 22 percent in April, the most current data available. The rise to 261,559 units was a considerable turnaround compared to the 213,780 starts in the March SAAR figures.
Despite the rising SAAR, the trend in housing starts was essentially flat in April, with the six-month moving average of Canada’s monthly SAAR landing at 240,403 units, down marginally from its 240,876 units in March.
The monthly SAAR of urban starts in centers with a population of at least 10,000 increased 26 percent, with 241,585 units recorded in April. Multi-unit urban starts increased 33 percent to 201,621 units, while single-detached urban starts decreased two percent to 39,964 units.
The Vancouver, Toronto, and Montreal Comparative Market Analysis (CMA) all recorded increases in total SAAR housing starts in April. Vancouver was up 36 percent; Toronto 54 percent; and Montreal 43 percent. Both Toronto and Montreal recorded declines in single-detached starts that were offset by large increases in multi-unit starts. Vancouver posted increases in both segments.
“While both the SAAR of housing starts and the trend have returned to levels observed before the pandemic, housing starts are expected to drop significantly in 2023 before seeing some recovery in 2024 and 2025, according to our latest forecast,” stated CMHC’s deputy chief economist. “The expected decline is due to constraints in new construction, including labour shortages, as well as higher construction and borrowing costs for housing developers.”
It is hoped that business will improve for the residential and commercial construction, and thus give a boost to the Hardwood industry.
