The Globe and Mail reports in its Tuesday edition that until 2018, the price of lumber had not broken above the $500-per-1,000-board-feet level, holding in a range of $200 to $500 per 1,000 BF (all figures U.S.). Guest columnist Brian Donovan writes that during the initial days of COVID-19, the price of lumber dropped more than 50 per cent. Since then we have seen it rise and fall three times by at least 50 per cent, reaching an all-time high in May, 2021, of $1,686. U.S. housing starts in June were down to 1.6 million annualized units, their lowest level since September, 2021. In July, U.S. housing starts fell further, to 1.45 million annualized units. In addition, the lumber dispute lingers on. During recessionary times, and especially with rising interest rates, we see a slowdown in housing starts that causes a reduction in demand for lumber, thereby softening prices. Rates are expected to continue to climb by at least another percentage point into the new year as a means to slow inflation. Mr. Donovan says he therefore expects lumber prices to remain at or below their current level until the next economic expansion, though a lower than average housing stock and/or reduced wood supply could affect this outlook.
© 2023 Canjex Publishing Ltd. All rights reserved.