Quebec Business Trends – October-November 2022 

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Contacts recently advised log supplies were better than in late summer. With warm weather conditions of summer, sawmills had to work fast to process, dry and ship them to avoid staining. Depending on areas contacted, sales for green and kiln-dried grade lumber were slow. End users and wholesalers have ample supplies based on their needs, and so are controlling purchases as required. Prices for grade lumber are being affected in a downward trend due to steady production and controlled purchasing. Some species affected are Red and White Oak, and Walnut.
According to some contacts, demand for Ash was more closely aligned with supply than most species during late summer. Due to the ravages of the Emerald Ash Borer, standing timber of this species is limited, and so sawmill production is declining as a result. On the domestic front, demand is slow compared to earlier this year, and export markets for Ash are said to be off.
Sawmill operators noted that moving developing green Cherry production is getting a bit more difficult. Depending on areas contacted there are price variances for this species. Kiln-dried Cherry markets are reported to be unfavorable, except with some exporters with longstanding Cherry customers in China who are seeing decent activity, but prices are continuing to soften.
Basswood has seen record level sales during the first six months of the year due to strong demand from established customers and buyers seeking lower cost alternatives to other species. Some contacts said it is still their best seller.
Demand for the regionally important Hard Maple is slow from end users and wholesalers, which appears to be a result of elevated customer inventories rather than a decline in consumption. This is impacting kiln-dried sales volumes and is affecting prices downward for certain grades and thicknesses.
Soft Maple markets contracted since the first half of the year. Sawmill production is reported to be ramping up in the second quarter, with supplies going from scarce to ample in a short timeframe. Green and kiln-dried prices went down from their record highs. Prices are now reported as steady for Sap and Better and Unselected products.
Poplar is in great demand from moulding, furniture, millwork, and other product manufacturers and is seeing good quantities shipped to export markets. Domestic market demand is even with production levels. Prices are going down for green lumber and for kiln-dried stocks.
Sawmillers and wholesalers of Hickory are finding it more challenging to make a sale than earlier in the year. The demand from flooring manufacturers has gone down as the housing sector has slowed down. Most have sufficient supplies on hand to meet their needs, while they are also dealing with sluggish sales on the finished goods side. The same is seen in the moulding and millwork and cabinet manufacturing sectors.
Contacts said sales of Red Oak have dropped in the U.S. and to overseas markets. Flooring manufacturers are controlling purchases currently. Others who also usually purchase kiln-dried Red Oak are taking a cautious approach to buying No. 2A and Better as demand and pricing for kiln-dried Red Oak are off and falling. Some reported that prices had been decent for this species the first half of the year but lost traction by summer’s end, especially to China, and quiet on the domestic front.
Like other species, White Oak also saw a rise in sales through the first quarter of the year, with a slowdown starting in June through August. Prices have been affected for most grades and thicknesses, with the concern of paying too much for green White Oak.
Demand for Walnut has lagged compared to production and is reported as having slowed down in domestic markets, as it has for exports to China, resulting in lower prices for this species.
According to a survey released this summer from HomeStars, Canadian homeowners spent significantly more on renovations in the past year than in years past. On average, those who completed indoor renovations in the last 12 months spent $13,000—up from $8,300 in the preceding 12-month period (March 2020 to March 2021). Although more Canadians indicated they intended to pause home renovations into 2023, even with rising material and labor costs it is estimated that homeowners, on average, will double their total home reno spending.
With 80 percent of respondents reporting to have cash on hand for planned home renovations, there was an average increase of 57 percent in total spending for indoor renovations. HomeStars also saw the continued trend that Canadians want to stay put. Three-in-four (76 percent) of those surveyed reported that they are not considering moving in the next 12 months, while 14 percent are currently undecided.
Though most of Canada has eased out of many pandemic restrictions, the pandemic continued to motivate Canadian homeowners to renovate their homes. In fact, two in five (40 percent) homeowners say the presence of COVID-19 restrictions influenced their decision to renovate. Spending more time at home and having extra cash on hand because of the pandemic encouraged even more homeowners to renovate—resulting in an 8 percent increase from 2021.
HomeStars also surveyed 985 homeowners from its database this summer to get a sense of whether intentions for renovations for 2023 had changed following increases in mortgage rates. Despite more homeowners holding back renovations, HomeStars found intent to renovate remained high.

By Miller Wood Trade Publications

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

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