Recovery in US housing market to drive B.C forestry sector in 2015

VANCOUVER (Scrap Monster): The B.C Forestry sector looks poised for a big boost in 2015, mainly on account of strong recovery in US housing market and robust demand growth from Asian countries, especially China. At the same time, the industry is likely to see more mill closures during the year. Industry participants also expect the US and Canada to resume controversial Softwood Lumber Agreement between the US and Canada.

According to International Wood Markets Group, the US housing sector witnessed slow growth in 2014. The recovery was not as rapid as it was forecast. However, the group sees sustained recovery in the US during this year.

Chinese economic growth has slowed down significantly. The reported growth rates of 7.3% are much lower when compared with earlier growth rates of 9% by the country. Meantime, Japan has reportedly entered into recession phase. The hike in tax rates has reduced the spending on housing starts. Despite the slowdown in these major lumber export destinations, Council of Forest Industries forecast strong export growth to the region. Additionally, the exporters to south may benefit from weak Canadian dollar.

Although, the US government is yet to clarify its stand, the industry participants see chances of reopening of the Softwood Lumber Agreement signed between the US and Canada in 2006. The signing of the agreement is expected to bring increased stability and certainty in trade between the two nations.

Mountain pine beetle infestation is likely to cut down timber harvests in the region, thereby leading to more mill closures. The Council predicts higher lumber prices during the year 2015.