Forests Minister Pat Bell believes 2010 is ending on a high note for B.C.’s forestry sector.
“The B.C. forest sector was much busier this year and it appears that the worst of the economic downturn is now behind us,” Bell said Wednesday.
He pointed to a recent PwC report that showed positive second-quarter earnings for some western Canadian forestry giants such as West Fraser Timber Co. Ltd. (TSX:WFT) and Canfor Corp. (TSX:CFP).
Bell also said steady demand from Asia is an “encouraging indicator” that the sector is poised to rebound in the near future.
In September, the relative value of products sent to China and Japan cracked the 40% threshold for the first time. (See “Asian demand for B.C. wood hits new high” – BIV Business Today, December 10.)
In October, 42.8% of the value of B.C.’s forest product exports was shipped to China and Japan compared with 40.4% sent to the U.S.
Michael Armstrong, a director with PwC’s global forest, paper and packaging practice, said although Asian demand has helped the sector, those export numbers are somewhat clouded by the fact exports to the U.S. are so low.
“On a percentage basis, it’s picking up for sure and picking up some the slack, but it won’t replace the U.S. housing start demand when that returns,” Armstrong said.
Check out this week’s edition of Business in Vancouver for more about the challenges B.C.’s forestry sector faces as it increases its focus on Asian markets.