U.S. Sawmill Output Stalls as Capacity Peaks and Utilization Slips

Rubber and Wood | 2025-12-24 11:11:01 | By Paul Ploumis

Sawmill capacity, meanwhile, declined 1.2% from the first quarter of 2025 but remains well above earlier years, sitting 4.5% higher than in the second quarter of 2023.

Summary

Stabilized Output: U.S. sawmill production has shown limited momentum over the past two years, with output only marginally above 2023 levels despite benchmark revisions.
Capacity vs. Utilization Gap: National sawmill capacity peaked in Q4 2024 and remains elevated, but utilization rates have weakened as capacity growth outpaced production.
Market Pressures Persist: Soft lumber prices have driven mill curtailments, early-2025 capacity reductions, and continued employment declines, partly offset by automation-driven productivity gains.

SEATTLE (Scrap Monster): U.S. sawmill output has shown little momentum over the last two years, reflecting a period of stabilization rather than growth, according to the Federal Reserve’s latest G.17 Industrial Production data. The report incorporated an annual benchmark revision that lifted estimates for both sawmill production and capacity, indicating that current output now stands roughly 7.5% above 2017 levels. Revised figures also show national sawmill capacity reaching a high point in the fourth quarter of 2024.

Sawmill Production Flat over Last Two Years

Based on a four-quarter moving average, production edged up 0.9% in the second quarter of 2025 compared with the prior quarter. Even so, overall output remains only marginally higher—about 0.3%—than levels recorded in 2023, underscoring a prolonged period of subdued activity.

Sawmill capacity, meanwhile, declined 1.2% from the first quarter of 2025 but remains well above earlier years, sitting 4.5% higher than in the second quarter of 2023. This divergence reflects weaker utilization rates, which have trended downward since 2017 as capacity additions outpaced production growth.

Persistently soft lumber prices over the past two years have encouraged mill curtailments and closures, contributing to early-2025 capacity reductions. At the same time, employment at sawmills continues to fall, largely offset by productivity gains from automation and modernization.