Carolyn Rogers
OTTAWA—The Bank of Canada has a chance later this week to either rebut or buttress traders’ expectations for at least three interest-rate increases in 2026 when its No. 2 official speaks to a business audience in Western Canada. The central bank left its policy rate unchanged March 18, arguing that it was premature to determine the total economic effect from the war in Iran. Bank of Canada Gov. Tiff Macklem added that the risk of higher energy costs spreading and lifting prices for other goods and services appeared contained, reflecting an elevated level of spare capacity in the economy. Traders believe differently, and as Monday morning had priced in the likelihood of up to three interest-rate increases by the end of 2026, reflecting fears of a prolonged period of sharply higher energy prices. Yields on two- and five-year government of Canada bonds climbed since last Wednesday. [to access the full story a WSJ subscription is required]
Lumber futures fell below $600 per thousand board feet as a slowdown in the North American housing market and rising financing costs outweighed persistent supply constraints. This downward pressure was driven by a 5.4% decline in building permits and a sharp 14.2% collapse in single-family housing starts, which signaled a cooling of construction activity as the spring season began. Additionally, 30-year fixed mortgage rates climbed to 6.22% following the Federal Reserve’s decision to hold interest rates steady, the market was further pressured by a sharp drop in crude oil prices that reduced the energy-heavy transport and production overheads. These factors effectively neutralized the marginal one-point gain in the NAHB Housing Market Index to 38, leaving 37% of builders reliant on deep price cuts to move a 2.4% increase in unsold inventory. Structural supply issues like the 45% combined duties on Canadian softwood and ongoing sawmill closures continue to provide a floor.
Mercer posted Q4 earnings per share (EPS) of -$4.61 against a consensus estimate of -$0.83, a miss that signals the commodity cycle has gone from painful to existential. The headline driver was a $238.7 million non-cash impairment charge, including a $203.5 million write-down on its Peace River hardwood pulp mill. …International Paper’s Q3 2025 losses look alarming on the surface, with a $1.01 billion impairment on its Global Cellulose Fibers business and $675 million in accelerated depreciation from mill closures. But adjusted EBITDA came in at $859 million, up 28% sequentially. IP is taking pain by choice. Mercer is absorbing pain it cannot control. …IP’s pivot to pure-play global packaging via DS Smith gives it pricing leverage and diversified end markets. Mercer’s mass timber order book, at roughly $163 million in contracts including data center projects, is a genuine bright spot, but it cannot offset a pulp business bleeding cash.
The Bank of Canada held its benchmark interest rate at 2.25% today as the economy performs below expectations, but war in the Middle East threatens higher inflation. The central bank’s decision to keep to the sidelines today was widely expected, but the future path for the policy rate is much less clear. Governor Tiff Macklem says in prepared remarks that the Bank of Canada is in a “dilemma” with U.S. trade uncertainty keeping the economy soft, but the Iran war sending global oil prices surging and likely spurring higher inflation in the months to come. Macklem says the central bank will look through the immediate inflationary hit from the war, but monetary policymakers will move to prevent persistent price hikes if the conflict persists or broadens. Statistics Canada reported an economic contraction in the fourth quarter of the year and sharp job losses in February.
Lumber futures climbed past $600 per thousand board feet as stabilizing housing sentiment and tightening production capacity across North America reversed a two month downward trend. The NAHB Housing Market Index edged up to 38 in March with buyer traffic and future sales expectations showing marginal gains despite persistent economic uncertainty. While 37% of builders continue to offer price cuts to attract buyers the market is finding support from a 29.1% surge in multifamily housing starts and a 7.2% rise in total residential construction activity. On the supply side mill closures and elevated duties on Canadian imports are projected to remove over 1.3 billion board feet from the market this year. Geopolitical tensions in the Middle East further pressure the outlook as rising energy costs inflate transport and shipping expenses for global timber. These factors suggest a shift toward a supply constrained environment that offsets the impact of high mortgage rates.
Canadian housing starts posted a modest rebound in February, but economists and industry data pointed to a market still losing momentum beneath the surface. The latest figures suggest builders are working through earlier project decisions while facing weaker demand, higher costs and a darker macro outlook. Canada Mortgage and Housing Corporation (CMHC) reported that the seasonally adjusted annual rate of housing starts rose 4.5% month over month to 250,900 units in February. That’s up from a revised 240,148 in January. The six‑month trend – a moving average used to smooth volatility – inched up just 0.4% to 256,005 units, essentially flat. …“Looking ahead, we expect heightened levels of business uncertainty and construction costs to weigh on the rate and trend of housing starts in the near‑to‑medium term.” …Among Canada’s largest centres, Montreal posted an 
Lumber increased to 602.00 USD/1000 board feet, the highest since February 2026. Over the past 4 weeks, Lumber gained 1.1%, and in the last 12 months, it decreased 9.51%.
Canada’s unemployment rate rose to 6.7% in February as more people looked for work and the economy shed 84,000 jobs, according to the latest report from Statistics Canada, released Friday. The country’s employment rate fell 0.2 percentage points to 60.6%, the second consecutive monthly decline. …Nearly 23% of the 1.5 million people who were unemployed in February were in long-term unemployment and had been continuously searching for work for 27 weeks or more. Statistics Canada said that percentage was little changed from a year ago, but “significantly above” the pre-COVID-19 pandemic average of 17.1% recorded during 2017-19. Economists had been expecting a gain of 10,000 jobs in February but the numbers were “weaker than expected,” said Andrew Hencic, director and senior economist at TD Economics. “Looking forward, we are expecting the labour market to tread water in 2026, as a rapid slowdown in population growth drags on labour supply, and soft economic momentum limits hiring,” he said.
Canada’s housing agency says the country made “meaningful” supply gains last year thanks to record rental construction and more “missing middle” type housing, however short-term imbalances remain for several markets. Housing construction rose 6% year-over-year in 2025 to 259,000 units, with activity exceeding the 10-year average across most major markets, according to CMHC’s spring housing supply report. …Rentals drove overall new housing supply in Canada last year, with the number of rental units under construction nearly doubling the 10-year average. …The trend led to increased vacancy rates and slower rent price rises compared with recent years. The report also highlighted the growth of “missing middle” housing — a term referring to gentle-to-medium density types such as accessory suites, multiplexes, row homes, stacked townhouses and low-rise apartments, which have often been under-represented in new supply. …Despite some encouraging trends, particularly for the rental market, housing construction for the home ownership market weakened overall.
OTTAWA–Housing starts in Canada are set to decline over the next three years due to higher construction costs, weaker demand and elevated levels of unsold inventory, the country’s housing agency said Wednesday. The outlook from Canada Mortgage and Housing Corp. represents another setback for the country’s residential real-estate sector, where prices and sales have declined following a prolonged period of strength fueled by immigration. It’s also a sign that, unlike in the recent past, housing-market activity won’t help propel the Canadian economy into a higher gear. Canada’s economy is struggling with slow growth, with manufacturers under duress from hefty U.S. tariffs. Furthermore, firms are scaling back spending and hiring plans as the future of a North American trade treaty is in doubt. CMHC said in a report that it expects housing starts to drop during the 2026-to-2028 period. [
VANCOUVER, BC — Conifex Timber reported results for the fourth quarter and year ended December 31, 2025. EBITDA* from continuing operations was negative $12.6 million for the quarter and negative $27.5 million for the year, compared to EBITDA of negative $2.1 million in the fourth quarter of 2024 and negative $13.6 million for the year. Net loss was $35.7 million or negative $0.87 per share for the year versus net loss in the preceding year of $29.8 million. …Our lumber production was 147.9 million board feet in 2025 reflecting an annualized operating rate of 62%. Lumber production in 2025 benefited from higher operating rates in the first half of the year but was impacted by curtailments and modified operating configurations in the second half of 2025 in response to lower lumber prices and higher duty deposit rates and tariff impositions. Lumber production in 2024 was 134.8 million board feet, reflecting an annualized operating rate of 56%.
ONTARIO — Potential buyers across Ontario are poised to receive a significant tax discount on newly-built homes, but only for a limited time, as the Ford government looks to boost a sector struggling with a slump in sales. As part of his spring budget, Finance Minister Peter Bethlenfalvy is expected to announce that the provincial portion of the harmonized sales tax will be removed for anyone buying a newly-constructed home, rewriting a policy the government introduced just months ago. …Ontario’s pledge to waive its portion of the HST came shortly after a similar announcement by the federal government — allowing first-time homebuyers to save up to $130,000 on a new home under $1 million, and lower rebates for homes costing up to $1.5 million. But the offer failed to ignite the market, forcing the government to take a second pass at the policy, and offer the discount to a wider swath of purchasers. 
The Trump Administration is scavenging for ideas to lower costs for home-buyers. One idea being considered is to ease credit checks for loans backed by Fannie Mae and Freddie Mac—that is, backed by taxpayers. Americans saw a version of this policy two decades ago, and it didn’t end well. Mortgage rates have dropped in the last year, but many Americans still can’t afford to buy a home. Enter the Mortgage Bankers Association, which is lobbying the Administration to let lenders underwrite mortgages based on a single credit report. The outfit says this would reduce borrower costs. Maybe, but taxpayers may pay a bigger price later if this results in more defaults. The Federal Housing Finance Agency currently requires lenders to pull three credit reports. …The real reason lenders want to eliminate the tri-merge requirement is so they can make more loans to borrowers with poor credit. [to access the full story a WSJ subscription is required]
Economists have pulled up their risk assessments of a U.S. contraction amid heightened uncertainty over geopolitical risk and a labor market that for the past year has shown strains over the past year. “I’m concerned recession risks are uncomfortably high and on the rise,” said Mark Zandi, chief economist at Moody’s Analytics. “Recession is a real threat here.” Twin concerns about growth and unemployment have triggered talk of stagflation, a characterization that Fed Chair Jerome Powell has rejected. But the threat of a prolonged war, pressure on consumers and a labor market that, outside of health care, lost hundreds of thousands of jobs last year has kept concerns elevated.
According to a joint study from the American Institute of Architects, the Associated General Contractors of America, and ConstructConnect® News, tariff-driven cost increases are causing delays and cancellations for some projects across the country. …The NAHB has worked alongside Senators Jacky Rosen and Chris Coons to introduce legislation that would address the housing affordability crisis by creating an exemption process for building materials from tariffs. The Housing Tariff Exclusion Act would exempt many home building materials from President Trump’s current and future tariffs and allow importers to apply for tariff exemptions. …Though the Housing Tariff Exclusion Act has not been passed yet, it would be a boon to not only manufacturers, but also to the construction teams and homeowners across the country that have been unable to move forward with their projects due to the current leap in pricing. 
WASHINGTON — Federal Reserve officials, convening in a wartime setting that began less than three weeks ago, are expected to hold interest rates steady on Wednesday even as a fresh jump in oil prices and data showing a rise in some aspects of inflation even before the start of the war with Iran may prompt them to recast the outlook for the U.S. economy, inflation and monetary policy. New projections to be released by the U.S. central bank at 2 p.m. EDT (1800 GMT) will show how policymakers assess the economic impact of President Donald Trump’s decision to launch an open-ended conflict in the Middle East, but the environment remained volatile even as they began the second day of their latest two-day policy meeting. …US producer prices rose in February by 3.4% on a year-over-year basis. Rising producer prices can feed into retail costs and signal higher future inflation.
WASHINGTON — The US economy, hobbled by last fall’s 43-day government shutdown, advanced at an unexpectedly sluggish 0.7% annual rate from October through December, the Commerce Department reported Friday in a big downgrade of its initial estimate. Growth in gross domestic product — the nation’s output of goods and services — was down sharply from 4.4% in last year’s third quarter and 3.8% in the second. And the fourth-quarter number was half the government’s first estimate of 1.4%; economists had expected the revision to go the other way — and show stronger growth. Federal government spending and investment, clobbered by the shutdown, plunged at a 16.7% rate, hacking 1.16 percentage points off fourth-quarter growth. For all of 2025, GDP grew 2.1%, solid but down from an initial estimate of 2.2% and from 2.8% in 2024 and 2.9% 2023.
US applications for unemployment benefits inched down modestly last week as layoffs remain at historically healthy levels despite a weakening job market. The number of Americans filing for jobless aid for the week ending March 7 fell by 1,000 to 213,000 the previous week, the Labor Department reported Thursday. Analysts surveyed by the data firm FactSet forecast 215,000 new benefit applications. Filings for unemployment benefits are viewed as a proxy for U.S. layoffs and are close to a real-time indicator of the health of the job market. While weekly layoffs have remained in a historically low range mostly between 200,000 and 250,000 for the past few years, a number of high-profile companies have announced job cuts recently, including Morgan Stanley,Block, UPSand Amazon in recent weeks. …For now, the U.S. job market appears stuck in what economists call a “low-hire, low-fire” state that has kept the unemployment rate historically low, but has left those out of work struggling to find a new job.
Unfortunately for retailers in the home sector, 2026 will likely look an awful lot like 2025. …While the pandemic offered a temporary financial boost, broad economic uncertainty caused many consumers to pull back on discretionary spending, leading to a decline in the high-ticket purchases. …The category has consistently seen year-over-year sales declines, according to the US Department of Commerce. …As was the case over the past few years, the weak housing market — driven by a lack of inventory and elevated interest rates — poses one of the biggest threats to the home sector this year. “The housing market is just stuck in neutral,” Zak Stambor said. “By and large, just few people are moving, and the lack of housing turnover means there’s a smaller-than-normal market for home goods.” “It’s the uncertainty that’s really driving the hesitation on the consumer side — where they should go, when they should buy, what they should buy in this market.”
NEW ZEALAND — The logging industry is warning that some companies could be on the brink as the conflict in Iran pushes up the cost of diesel. Logging operators say it’s increasingly difficult to get logs to port and if the situation drags on, export-reliant regions like South Canterbury and the west coast of the North Island could face shutdowns. The costs of shipping have risen dramatically, with rates going from roughly US$33 ($56) per cubic metre into China for March, through to about US$45 in April. Forest Management group director Glenn Moir said that would put some companies on the brink. “I can see that if it does continue, we’re going to face some real pressure in the higher-cost forests – so the ones that are further away from the market and have steeper country – just to make it economic.” There had been some huge cost pressures going through the chain.
European laminate flooring manufacturer sales declined 6.50% to 263.4 million m2 in 2025, according to the European Producers of Laminate Flooring (EPLF). The sales decreased from 281.6 million m2 in 2024. EPLF said the trend reflects the broader slowdown observed across construction markets, particularly in new residential builds and renovation activity, which continued to weigh on demand throughout the year. EPLF said the 2025 figures point to a “year of adjustment” for the laminate flooring sector. “While global volumes declined, demand remained comparatively more stable in the core European markets, which continue to represent the majority of EPLF sales,” it said. “Regional differences indicate that market conditions evolved at different speeds rather than following a single global pattern.” Europe accounted for more than 80% of total sales by EPLF member countries, confirming its position as the core market for the laminate flooring.
Timber imports into the United Kingdom declined to their lowest level in more than ten years during 2025. The data was reported by Timber Development UK (TDUK), the industry body representing the national timber supply chain. According to the organisation’s latest market review, total timber imports reached 9.1 million cubic metres in 2025. This figure represented a 2.2% decrease compared with the previous year. …Timber demand in the United Kingdom has now remained relatively flat for four consecutive years. …Softwood remains the dominant component of the UK timber market. The material accounts for approximately 61% of total timber imports. However, softwood imports declined by 4% during 2025. …Several traditional suppliers exported smaller volumes to the UK. Other suppliers partially offset these declines. Imports from Latvia and Finland increased during the same period. …Performance within the engineered wood category was uneven. Laminated veneer lumber and timber I-beams both recorded steady growth during the year.