The COVID-19 seventh wave is causing concerns for businesses, and the ongoing challenge of finding qualified and retaining employees continues, as well as truck transport and containers to ship products. With some improvement to supply chains, order backlogs have started to decline for secondary wood products manufacturers. Contacts noted that prices are trending down for many species, except for Hickory, Birch and Ash. Domestic markets are reported as doing well while exports to China and Europe have slowed down a bit.
Several sawmills and wholesalers noted Ash sales were going well, with exports being fair. However, demand from domestic and other international markets along with restrained production due to shortage of these trees is keeping supplies down and prices firm.
Prices for Basswood have been climbing due to low supplies and high demand for green and kiln-dried lumber. Because of its versatility, Basswood was being sought as an alternate species for others of higher costs. Contacts stated that prices for the popular species, like Hard and Soft Maple, and other alternative species, started moving lower, thus causing the price rise for Basswood to pause.
According to U.S. information, Cherry is not a popular species in North America despite the relatively low price. Volumes of exports to China are still continuing, but at a lower rate. Kiln-dried Cherry is therefore more abundant, with prices on a downward trend.
The regionally important Hard Maple has seen a change over the summer, as end users who were demanding more are restricting their purchases. Kiln-drying operators have ample supplies available. Hard Maple does remain the top seller for cabinet manufacturers, however order backlogs are moderating for some cabinet and cabinet component plants, as they are more cautious with raw material purchases. As such, prices have lowered for various grades and thicknesses for green and kiln-dried lumber.
Soft Maple is also seeing a slowdown in orders, whereas demand was high over spring and early summer. Supplies improved and markets were filled with this species. Also in the cabinet sector, demand for Soft Maple is strong, as it is for furniture manufacturers. End users, drying operations and wholesalers took steps to slow down Soft Maple receipts, and as such prices are being adjusted lower. Increased supplies and tighter controls on purchasing increased competition for kiln-dried Soft Maple.
Contacts reported green Hickory demand is holding up, especially from residential flooring manufacturers, and most thicknesses are selling well on both domestic and export markets. Kiln dried Hickory is also decent with inventories at manageable levels with prices steady.
Demand for Red Oak from China and residential wood flooring manufacturers slowed down, with shipments being identified as sluggish to several markets in the U.S. and abroad.
Depending on areas contacted, market conditions for White Oak are mixed. Exports to Southeast Asian markets are good, despite weaker Chinese business. In Europe, markets have slowed due to summer holidays. Kiln-dryers also are controlling green White Oak purchases, while flooring plants reduced their purchases of Nos. 2A and 3A.
Poplar supplies are ample, with sales and purchasing noted as decent for businesses. Most green grades and thicknesses are selling well. Prices have come down due to competitive pressures due to increased production over the past couple of months. Kiln dried Poplar conditions are reported as pretty much the same as for green.
No. 1 Common and No. 2A Walnut is moving better than the upper grades. Supplies of this grade are not excessive, while upper grades are reported as abundant relative to demand.
Favorable weather conditions for air drying lumber have boosted framestock supplies thus better balanced with demand.
Statistics Canada’s June Labor Force Survey showed Canada’s labor market was still tightening, making it difficult for Canadian employers to find workers. Employment fell by 43,000 in June, marking the first employment decline not associated with public health restrictions since the pandemic began. The reason stated is mainly due to people age 55 and older leaving the workforce.
Unemployment fell to a new record-low of 4.9 percent as a result of fewer people looking for work. The adjusted employment rate, which includes people who were not in the labor force but looking for work decreased to 6.8 percent, another record low.
An economist with the Conference Board of Canada said amid tight labor market conditions, employment rose among diverse groups such as recently landed immigrants and core-aged Indigenous workers living off reserve. Also, the employment rate among core-aged female workers was at 81.3 percent, just shy of the May record high. He added that these improvements suggested labor shortages were increasing labor market inclusivity by drawing in workers who traditionally face underemployment or lower rates of employment and labor force participation.
Employment in the services-producing sector declined by 76,000 in June, with losses spread across several industries, including retail trade. However, employment rose by 33,000 in the goods-producing sector, with gains in construction and manufacturing. Construction saw its first increase in March, and a Scotiabank economist said the increase was a sign that construction was ramping up again, but the decline in retail trade was cause for concern.
The tight labor market pushed up wages in Canada. In June, average hourly wages rose 5.2 percent to $31.24 on a year-over-year basis.
One option presented to support labor shortages was to welcome high levels of immigrants with skills that meet the demands for talent. In 2022, Canada is set to open its doors to a record 431,645 new permanent residents, and is currently on track to meet this target. Canada has landed about 200,000 new permanent residents in the first half of this year.
