Quebec Business Trends – March 2023

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Business was at a slower pace at the start of 2023 than the previous several months. As log and timber prices continued to be volatile, those in the forestry sector are taking a conservative approach to their purchases. The milder winter weather conditions have also had an impact on logging activity, and therefore, some report low log supplies. The supply and demand gap continues to shrink, although it is not equal for all species, which is more prevalent for green rather than kiln-dried lumber.

Ash supply is meeting demand overall, although some thicker stocks are not as available. Sales operations have been able to provide lumber for existing orders, but they are not building up inventory. Prices are reported as stable. Sawmills noted No. 1A and Better green Ash is moving well. Kiln drying operators who provide to export markets have been buying this species more than secondary manufacturers.

The regionally important Hard Maple species is not moving, noted sawmill and kiln drying operations. Extra effort is needed to obtain orders from wood component and cabinet manufacturers. This is due to downturn in housing both here in Canada and in the U.S. These companies have enough inventories to meet current needs, which is down from a year ago. A similar situation exists for Hardwood flooring manufacturers, with reduced production of these products. Therefore, there is an excess of Hard Maple on markets, causing price pressures.

Soft Maple sales are under the same conditions as Hard Maple, with limited sales to usually strong sectors. Case goods and moulding manufacturers are also controlling their purchases. As for many species, sales of Soft Maple are highly affected. Green and kiln-dried prices fell dramatically since their peak in the middle of 2022, and it also saw prices go down again early this year.

Basswood sales to window blind and shutter manufacturers have declined due to slower finished goods sales. Depending on the area contacted, prices are steady for some items and lower for others.

Cherry sales are rather flat everywhere, including domestic or international markets like the U.S., Mexico, most of Asia and Europe. Some sales are still being made with China. 

Hickory sales for those selling this species say it is holding up better than sales of other whitewoods. The flooring manufacturers are keeping up with demand. This is helping with the reduced demand from cabinet manufacturers. Exports have slowed to the Far East and to Mexico. 

With unfavorable logging conditions, Poplar receipts at sawmills have been down. Prices ranged from steady to firm. Kiln-dried inventories of this species have worked down, with most items available but not overly abundant. Demand is identified as decent for domestic sales and somewhat better to Vietnam, but flat in other areas.

Sawmills have been avoiding Red Oak and have lowered prices for White Oak logs due to falling lumber prices, resulting in reduced log receipts amid strong competition from stave plants. Some mills have cut more ties and other products instead of grade lumber. So, supplies of No. 2A and 3A Red and White Oak have declined and are not flooding markets. Some say green No. 2A and 3A Oak appears sufficient to meet current demand.

White Oak sales to overseas markets in January, such as Far East and European markets are reported as slow, while Vietnamese business was slightly better. On the domestic front, demand is weak. Some sawmills commented improved demand for green No. 1 Common and Better White Oak, as kiln dryers were increasing their inventories. Some mills were low on White Oak logs. This was causing prices to stabilize and in some instances, rebound. 

Walnut supply is limited and demand is higher, boosting green prices due to less logs going to sawmills for most of the past year. Green Walnut is selling better than kiln-dried Walnut, although demand has been showing signs of improvement, supplies are moderating, with prices noted as stable to firm.

The Quebec Labour Minister Jean Boulet announced Quebec’s minimum wage will rise by one dollar to $15.25 (Canadian) as of May 1, 2023. It will benefit about 298,900 workers, including 164,100 women. This increase, at 7.02 percent, is the largest percentage increase in the province’s minimum wage since 1995. The Quebec government says it is seeking to improve the purchasing power of low-income earners and encourage participation in the labor market. The minister calls the increases “balanced” and “responsible” and says they will not harm the competitiveness of businesses.

Benjamin Rousse, policy analyst with the Canadian Federation of Independent Businesses, said the 7.02 percent increase in minimum wage will have a “significant negative effect” on small-business owners, as they are already grappling with other issues, including inflation and the labor shortage. He said the best way to both raise wages and keep small businesses afloat is for governments to reduce tax burdens. 

By Miller Wood Trade Publications

The premier online information source for the forest products industry since 1927.

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