British Columbia lumber production remained steady in August, according to a November 1 report released by Central 1 Credit Union.
Despite this stability, momentum appeared to be stalling after gains earlier in the year, due to a slight dip in housing starts in the United States.
The production slowdown is expected to be temporary. Fears that quantitative easing would be tapered led to a jump in mortgage rates, resulting in a slowdown in housing starts. Housing starts are expected to pick up as interest rates decrease.
U.S. housing starts are forecast to increase nearly 25% in 2014. Reconstruction in Japan and other Asian markets will also drive lumber demand.
Annual lumber production is expected to increase 5% in 2013 and 10% in 2014.
Supply-side constraints will dampen B.C.'s forestry sector recovery, as output continues to be affected by the mountain pine beetle. Last week, Canfor and West Fraser announced mill closures due to the devastation caused by this epidemic. More than 55% of B.C.'s lodgepole pine is expected to be killed by 2015.
