Diversification appears to be paying off for B.C.'s forestry sector.
According to BC Stats, rising demand from key global markets for B.C.'s wood products is boosting the province's total export figures thus far this year.
For the first four months of 2013, B.C.'s wood exports have risen 50.8% to the U.S., 31.9% to China, 15.5% to Japan and 5.2% to the European Union compared with the same period in 2012.
Overall, total wood products exports have increased 34.8% to $2.5 billion from $1.9 billion last year. That's increased forestry's share of the province's exports to nearly 24% from 18.4% last year.
It's also contributed to an overall 4.2% increase in B.C. exports to $10.67 billion so far in 2013 from $10.24 billion in the same period last year.
According to Scotiabank's June commodity price index report, lumber prices have seen a correction over the past couple months (see "Lumber prices drop, but forestry still a strong bet" – BIV issue 1233, June 11-17). But prices aren't expected to threaten most of B.C.'s mills, according to Scotiabank's Patricia Mohr.
While prices have dropped to US$287 per thousand board feet (mfbm) as of mid-June from US$381 mfbm in April, Mohr expects a seasonal rally in prices for lumber and oriented strand board (OSB) in the late summer.
She's also predicting that the U.S. housing market recovery will continue. U.S. housing starts appeared to have recovered in May to 914,000 units per year after dropping to 856,000 units in April due to a temporary drop in multi-unit residential construction. But the recovery last month was less than expected due to the spring weather, which included the wettest May since 1995.
Mohr is expecting the housing market to grow again next year, with housing starts to rise to between 1.2 million and 1.3 million, helping to increase building material prices further. •
