Category Archives: Finance & Economics

Finance & Economics

Regulations, ‘fragmented’ construction sector holding back housing starts

The Canadian Press in the Daily Commercial News
May 21, 2024
Category: Finance & Economics
Region: Canada

OTTAWA — A study by Canada’s national housing agency says housing starts aren’t keeping pace with residential construction resources available due to restrictive regulations and a “highly fragmented” industry. CMHC’s Mathieu Laberge says Canada has the potential to build more than 400,000 homes per year — around two-thirds higher than the 240,267 housing starts last year. He says even with construction labour shortages posing a barrier to increasing supply, there were roughly 650,000 workers building homes in Canada in 2023, which is “the most we’ve ever seen. Laberge poses regulatory reform, particularly at the municipal level, as one solution to increasing productivity, as he notes rules around permit delivery, how many storeys and units a building can contain and development charges stand in the way of further development. …The federal government unveiled a plan last month to build 3.87 million new homes by 2031.

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US exports offshore bounced off historic lows in first quarter

RISI Fastmarkets
May 16, 2024
Category: Finance & Economics
Region: Canada, United States

North American softwood lumber exports to offshore destinations posted mild gains in the first quarter, sustaining the momentum evident in the second half of 2023. Canadian exports overseas reached 376 million board feet through March, nearly matching the 379 mmbf shipped in the first quarter of 2023. …Canadian exports to China fell 17% to 154 mmbf after surging 22% in all of 2023. Exports to Japan climbed to 105 mmbf, up 26% from the year-ago pace. Western S-P-F exporters have captured a growing share of the Japanese J-grade market in 2024 from European suppliers. …Further, rising log costs in Europe prompted lumber exporters to raise prices in Japan, providing Canadian suppliers with a price advantage in that market. …Canadian exports to the US increased 8% in the first quarter to 3.06 bbf. Shipments to the U.S. fell 6.7% in 2022 and 2023. US exports to offshore destinations reached 113 mmbf in the first quarter, up 28% from the 88 mmbf shipped in the first three months of 2023.

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GreenFirst reports Q1, 2024 net loss of $13.4 million

By GreenFirst Forest Products Inc.
Business Wire in the Financial Post
May 14, 2024
Category: Finance & Economics
Region: Canada

TORONTO — GreenFirst Forest Products announced results for the first quarter ended March 30, 2024. Q1 2024 net loss from continuing operations was $13.4 million compared to net loss of $21.6 million in Q4 2023. Adjusted EBITDA for Q1 2024 was negative $3.5 million compared to negative $18.0 million in Q4 2023. In Q1 2024, this represents a positive contribution from the Company’s lumber operations and a negative contribution from the paper operations and overhead. …“We initially saw some positive momentum in lumber pricing at the start of the first quarter; however, this positive trend reversed at the end of the quarter resulting in curtailments by some of our competitors in the lumber industry,” said Paul Rivett, GreenFirst’s Executive Chair. 

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Canadian Housing Starts Edge Down 1% in April

By Canada Mortgage and Housing Corporation
Cision Newswire
May 15, 2024
Category: Finance & Economics
Region: Canada

OTTAWA — The total monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada decreased 1% in April (240,229 units) compared to March (242,267), according to Canada Mortgage and Housing Corporation (CMHC). The six-month trend in housing starts decreased 2.2% from 243,907 units in March to 238,585 units in April. The trend measure is a six-month moving average of the SAAR of total housing starts for all areas in Canada. The actual number of housing starts across Canada in urban centres of 10,000 population and over was down 9% to 18,486 units in April compared to 20,231 units in April 2023. The year-over-year decrease was driven by lower multi-unit starts, down 11%, whereas single-detached starts increased 3%. …”We expect to see continued downward pressure in these large centres,” said Bob Dugan, CMHC’s Chief Economist.

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Interfor reports Q1, 2024 net loss of $73 million

Interfor Corporation
May 9, 2024
Category: Finance & Economics
Region: Canada, United States

BURNABY, BC — Interfor Corporation recorded a net loss in Q1’24 of $72.9 million compared to a net loss of $169.0 million and a net loss of $41.3 million in Q1’23. Adjusted EBITDA was a loss of $22.3 million on sales of $813.2 million in Q1’24 versus a loss of $51.4 million on sales of $785.9 million in Q4’23 and Adjusted EBITDA of $26.1 million on sales of $829.9 million in Q1’23. Notable items include: due to ongoing weak lumber markets… Interfor announced plans to reduce its lumber proaction by 175 million board feet, representing just under 10% of its normal operating stance. Although North American lumber markets over the near term are expected to remain depressed as the economy continues to adjust to inflationary pressures… Interfor expects that over the mid-term, lumber markets will continue to benefit from favourable underlying supply and demand fundamentals. 

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Mercer International reports Q1, 2024 net loss of $16.7 million

Mercer International Inc.
May 9, 2024
Category: Finance & Economics
Region: Canada, International

NEW YORK, NY – Mercer reported first quarter 2024 Operating EBITDA of $63.6 million, an increase from $27.5 million in the same quarter of 2023 and $21.1 million in the fourth quarter of 2023. In the first quarter of 2024, net loss was $16.7 million, which included a non-cash loss on disposal of $23.6 million relating to the dissolution of the Cariboo Pulp and Paper joint venture, compared to a net loss of $30.6 million in the first quarter of 2023 and a net loss of $87.2 million in the fourth quarter of 2023. …Mr. Juan Carlos Bueno, CEO, stated: “In the first quarter, our operating results were positively impacted by an improved pulp and lumber pricing environment, lower fiber and other production costs and no planned maintenance downtime. NBSK pulp prices in Europe and North America continued to improve in the first quarter.

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Slowdown in do-it-yourself home projects weakens lumber markets

By Brent Jang
The Globe and Mail
May 5, 2024
Category: Finance & Economics
Region: Canada, United States

A slowdown in home repair and remodelling projects has weakened lumber markets, the latest setback for Canadian sawmills struggling financially with depressed lumber prices. Lower-than-expected housing starts in Canada and the United States have also eroded lumber demand. On the supply side, lumber producers in British Columbia that have coped for years with decreased access to timber in the province will be facing even tighter constraints. “Everybody is holding their breath a bit because of this kind of perfect storm,” Linda Coady, president of the BC Council of Forest Industries said. …The impact of lower lumber prices already has been severely felt at a smaller company, Surrey, B.C.-based Teal-Jones Group. …Larger producers will be able to withstand the slump in lumber prices, but smaller companies will find it more difficult, said Ric Slaco, an industry consultant and former chief forester at Interfor. [to access the full story a Globe and Mail subscription is required]

 

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Paper Excellence announces price increase on NBSK and SBSK pulp, effective May 1

By Bryan Smith
RISI Fastmarkets
May 2, 2024
Category: Finance & Economics
Region: Canada, United States

Paper Excellence Group informed North American customers its baled paper grade bleached softwood kraft market pulp prices will increase, effective May 1, Fastmarkets has learned. Richmond, BC-headquartered PE announced a northern bleached softwood kraft list price of $1,690/tonne. PE did not state how much that’s up, however it is $80/tonne higher than its last announced price. On southern bleached softwood kraft (SBSK), PE announced a new list price of $1,620/tonne, market contacts told Fastmarkets. That’s up $100/tonne vs its last announced price. PE Group was the only known paper grade BSK producer to announce May prices in North America through midday Tuesday. …Prior North American price hikes came from Brazilian producers Suzano, Eldorado, and Klabin on bleached eucalyptus kraft as well as Alberta-Pacific Forest Industries on northern bleached hardwood kraft. 

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Band of Canada says there’s a limit to how far US and Canada rates can diverge

Reuters
May 2, 2024
Category: Finance & Economics
Region: Canada, United States

Tiff Macklem

OTTAWA — There is a limit to how far U.S. and Canadian interest rates can diverge but “certainly we’re not close to that limit”, Bank of Canada Governor Tiff Macklem said. Macklem reiterated that the central bank was waiting to see whether recent drops in underlying inflation would be sustained before starting to cut rates from a 23-year high of 5%. But in the US, by far Canada’s largest trading partner, the Federal Reserve on Wednesday highlighted recent disappointing inflation readings that could ensure rate cuts south of the border come at a slower pace. …Macklem reiterated that tighter monetary policy was having more of an impact in Canada than in the US, given higher rates of household debt and the fact that most mortgages in Canada have to be renewed every five years. Inflation is currently at 2.9% – still well above the central bank’s 2% target.

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Tolko v. British Columbia – Clarifying “non-qualifying activity” under the Provincial Sales Tax Exemption Regulation

By Adrian Zee, Thorsteinssons LLP
Lexology
May 21, 2024
Category: Finance & Economics
Region: Canada, Canada West

Adrian Zee

The BC Supreme Court recently clarified the definition of “non-qualifying activity” under subsection 90(1) of the Provincial Sales Tax Exemption and Refund Regulation (the “PSTERR”). The issue was whether pipes used to move steam at Tolko’s place of business qualified for an exemption from Provincial Sales Tax. …At the Site, Tolko produced electricity and wood products for sale, as well as steam, compressed air, and electricity for its own use. …Tolko argued that the steam production was part of a “fully integrated ‘continuous loop’ of manufacturing activities which, combined together, power the processing facilities and produce its wood products and electricity for sale.” The Court agreed and held that the phrase “not a non-qualifying activity” does not require the “qualifying activity” to be part of the steam production itself, but instead required reference to the larger process. …The decision stands as a rebuke of the narrow approach taken in administering PSTERR exemptions.

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Doman Building Materials reports Q1, 2024 net income of $14.4 million

Doman Building Materials Group Ltd.
May 9, 2024
Category: Finance & Economics
Region: Canada, Canada West

VANCOUVER, BC — Doman Building Materials Group announced its financial results for the quarter ended March 31, 2024. For the three-month period, consolidated revenues decreased by 1.1% to $602.5 million, compared to $609.1 million in 2023. …EBITDA and Adjusted EBITDA for the first quarter of 2024 amounted to $44.8 million and $45.6 million, respectively, compared to EBITDA of $33.2 million during the same period in 2023. Net earnings for the three-month period ended March 31, 2024, were $14.4 million versus $14.9 million in the comparative period of 2023. …The Company declared a dividend of $0.14 per share(3) in in the quarter, which was unchanged compared to 2023. “Despite continued price erosion for most lumber product categories, the year is off to a good start,” commented Amar S. Doman, Chairman.

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Conifex reports Q1, 2024 net loss of $4.5 million

By conifex Timber Inc.
Globe Newswire
May 9, 2024
Category: Finance & Economics
Region: Canada, Canada West

VANCOUVER, BC — Conifex Timber reported results for the first quarter ended March 31, 2024. During the first quarter of 2024, we incurred a net loss of $4.5 million compared to a net loss of $5.3 million in the previous quarter and net loss of $8.1 million in the first quarter of 2023. …EBITDA was negative $0.5 million for the quarter compared to EBITDA of negative $3.5 million in the fourth quarter of 2023 and negative $6.9 million in the first quarter of 2023. The first quarter results were favourably impacted by $3.0 million insurance settlement for the loss of the Osilinka Logging Camp. …Our lumber production in the first quarter of 2024 totalled approximately 44.5 million board feet, representing operating rates of approximately 74% of annualized capacity. 

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Western Forest Products reports Q1, 2024 net loss of $8M

Western Forest Products Inc.
May 7, 2024
Category: Finance & Economics
Region: Canada, Canada West

VANCOUVER, BC– Western Forest Products reported a net loss of $8.0 million in the first quarter of 2024, as compared to a net loss of $17.7 million in the first quarter of 2023, and a net loss of $14.3 million in the fourth quarter of 2023. Adjusted EBITDA was negative $4.2 million in the first quarter of 2024, as compared to negative $5.0 million in the first quarter of 2023, and negative $1.2 million in the fourth quarter of 2023. Other highlights include: lumber shipments of 131 million board feet (versus 170 million board feet in Q1 2023); Japan lumber shipments of 29 million board feet (versus 15 million board feet in Q1 2023); and average lumber selling price of $1,351 per mfbm (versus $1,241 per mfbm in Q1 2023), benefiting from a stronger sales mix, but offset by lower lumber prices

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Taiga reports Q1, 2024 net earnings of $12.8 million

By Taiga Building Products Ltd.
Cision Newswire
May 3, 2024
Category: Finance & Economics
Region: Canada, Canada West

BURNABY, BC — Taiga Building Products reported its financial results for the three months ended March 31, 2024 and 2023. The Company’s consolidated net sales for the quarter ended March 31, 2024 were $393.6 million compared to $408.5 million over the same period last year. The decrease in sales by $14.9 million or 4% was largely due to selling lower volumes of commodity products. …Net earnings for the quarter ended March 31, 2024 decreased to $12.8 million from $13.5 million over the same period last year primarily due to decreased gross margin. EBITDA for the quarter ended March 31, 2024 was $19.8 million compared to $22.5 million for the same period last year.

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Stella-Jones reports Q1, 2024 net income of $77 million

Stella-Jones Inc.
May 8, 2024
Category: Finance & Economics
Region: Canada, Canada East

MONTREAL, Quebec — Stella-Jones announced financial results for its first quarter ended March 31, 2024. Sales in the first quarter of 2024 were up 9% to $775 million, compared to $710 million last year. Excluding the contribution from the acquisition of Baldwin Pole and Piling Company, sales were up , or 7%. The increase was driven by a 10% organic sales growth of the Company’s infrastructure businesses, namely utility poles, railway ties and industrial products, partially offset by lower residential lumber and logs and lumber sales when compared to the same period last year. …Record first quarter EBITDA was up 30% to $156 million, a margin of 20.1% and net income of $77 million was up 32% from Q1 2023. Eric Vachon, CEO of Stella-Jones, said “Our Q1 performance reflects the ongoing robust fundamental market trends in our infrastructure product categories and an improvement over our solid fourth quarter results.”

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Cascades Inc. reports Q1, 2024 net loss of $20 million

By Cascades Inc.
Cision Newswire
May 9, 2024
Category: Finance & Economics
Region: Canada, Canada East

KINGSEY FALLS, Quebec — Cascades reported its unaudited financial results for the three-month period ended March 31, 2024. Highlights include: Sales of $1,109 million (compared with $1,138 million in Q4 2023 and $1,134 million in Q1 2023); net loss of $(20) million compared to a net loss of $(75) million in the same period of 2023. …CEO Mario Plourde said: “First quarter 2024 results met expectations, considering the context of elevated raw material prices, and ongoing inflationary pressure on operational costs. The softer results similarly reflect costs associated with the Trenton mill, which ceased operations at the end of January. Conversely, Specialty Products had a solid quarter, driven by favourable sequential raw material and selling prices, and operational cost benefits reflecting efficiency and productivity initiatives. 

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Acadian Timber reports Q1, 2024 net income of $6 million

Acadian Timber Corp.
May 8, 2024
Category: Finance & Economics
Region: Canada, Canada East

EDMUNDSTON, New Brunswick — Acadian Timber reported financial and operating results for the three months ended March 30, 2024. …During the first quarter, Acadian generated sales of $28.8 million, compared to $22.4 million in the prior year period. Acadian’s first significant sale of carbon credits occurred during the first quarter and contributed $4.9 million to sales. Timber sales volumes increased 35% year-over-year. Biomass sales volume decreased 59% from the prior year quarter. …Net income for the first quarter totaled $6.0 million compared to net income of $5.6 million in the same period of 2023. Higher operating income was offset by lower non-cash fair value adjustments and lower gains on sale of timberlands and other fixed assets, as well as higher income tax expense, as compared to the prior year period.

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Goodfellow reports Q1, 2024 new loss of $108,000

Goodfellow Inc.
April 30, 2024
Category: Finance & Economics
Region: Canada, Canada East

DELSON, Quebec — Goodfellow announced today its financial results for the first quarter ended February 29, 2024. The Company reported a net loss of $108 thousand to a net loss of $211 thousand a year ago. Consolidated sales for the three months ended February 29, 2024 were $105.3 million compared to $105.9 million last year. Though under pressure from lingering inflation and cautious consumer sentiment, Goodfellow achieved a comparable overall financial performance. …With uncertain economic conditions ahead, the Company will continue to protect margins and seize opportunities for growth with new and existing customers.

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New Home Sales in April Down on Higher Mortgage Rates

By Danushka Nanayakkara-Skillington
NAHB – Eye on Housing
May 23, 2024
Category: Finance & Economics
Region: United States

Mortgage rates that averaged above 7% since mid-April per Freddie Mac data acted as a drag on new home sales last month. Sales of newly built, single-family homes in April fell 4.7% to a 634,000 seasonally adjusted annual rate from a downwardly revised reading in March, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in April is down 7.7% from a year earlier. …New single-family home inventory in April remained elevated at a level of 480,000, up 12.1% compared to a year ago. This represents a 9.1 months’ supply at the current building pace. A measure near a six months’ supply is considered balanced.

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AF&PA Details U.S. Paper Production and Capacity Trends in Annual Survey

By American Forest and Paper Association
Paper Age
May 17, 2024
Category: Finance & Economics
Region: United States

The American Forest & Paper Association (AF&PA) released the 64th Paper Industry Annual Capacity and Fiber Consumption Survey. The report provides detailed data on U.S. paper industry capacity and production compiled by the AF&PA statistics team. U.S. paper and paperboard capacity declined by 1.6% in 2023, to 79.7 million tons. That compares to an average decline of 0.9% per year since 2014. U.S. paper and paperboard production declined 7.2% last year, with declines in all categories except tissue. …Four machines totaling 2.1 million tons of containerboard and packaging paper capacity started up during 2023, all using 100 percent recycled fiber. However, more than 1.7 million tons of capacity, mostly using wood fiber, was permanently removed in 2023 as the industry faced demand weakness from customer destocking and economic headwinds.

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US New Single-Family Home Size Decline Continues

By Robert Dietz
NAHB – Eye on Housing
May 21, 2024
Category: Finance & Economics
Region: United States

According to first quarter 2024 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area came in at 2,140 square feet, the lowest reading since the second half of 2009. Average (mean) square footage for new single-family homes registered at 2,343 square feet. Since Great Recession lows, the average size of a new single-family home is now just 1.2% higher at 2,387 square feet, while the median size is about 4.5% higher at 2,170 square feet. Home size rose from 2009 to 2015 as entry-level new construction lost market share. Home size declined between 2016 and 2020 as more starter homes were developed. After a brief increase during the post-COVID building boom, home size is trending lower and will likely continue to do so as housing affordability remains constrained.

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US Custom Home Building Slowdown

By Robert Dietz
NAHB – Eye on Housing
May 20, 2024
Category: Finance & Economics
Region: United States

NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates a slowing market for custom home building after a recent gain in market share. The subsector’s greater reliance on cash buyers has not shielded it from recent market softening, which in turn is putting downward pressure on home builder sentiment. There were 34,000 total custom building starts during the first quarter of 2024. This marks an almost 3% decline compared to the first quarter of 2023, which runs counter to many of the gains seen in other home building subsectors. Over the last four quarters, custom housing starts totaled 177,000 homes, a a more than 8% decline compared to the prior four quarter total (193,000).

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US Housing Starts vs Completions Looks Ominous for the Economy

By Mike Sherlock
Mish Talk
May 16, 2024
Category: Finance & Economics
Region: United States

Housing completions have surpassed housing starts. History suggests bad things follow. But what’s happening this time? …Year-to-date in 2024, U.S. multifamily completions are outpacing new starts at the widest levels since 1975. The gap will likely widen further. Completions are at multi-decade highs while starts continue to rapidly plunge due to several headwinds: high rates, flat-to-falling rents for lease-ups (depending on the market), and construction costs often coming in above replacement value. Simply put: It’s very difficult to start new unsubsidized apartment projects right now. Folks on this app often don’t realize that developers do not self-fund their own projects. …So while supply will continue to exceed demand in 2024, keeping downward pressure on rents, you can see how demand could exceed supply again by 2025, which would in turn put upward pressure on rents.

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Higher Mortgage Rates Hammer US Builder Confidence in May

By Robert Dietz
NAHB – Eye on Housing
May 15, 2024
Category: Finance & Economics
Region: United States

With mortgage rates averaging above 7% for the past four weeks per data from Freddie Mac, builder sentiment posted its first decline since November 2023. Builder confidence in the market for newly built single-family homes was 45 in May, down six points from April, according to the NAHB/Wells Fargo Housing Market Index (HMI). The market has slowed since mortgage rates increased and this has pushed many potential buyers back to the sidelines. A lack of progress on reducing inflation pushed long-term interest rates higher in the first quarter and this is acting as a drag on builder sentiment. …The May HMI survey also revealed that 25% of builders cut home prices to bolster sales in May, ending four months of consecutive declines in this metric. However, the average price reduction in May held steady at 6% for the 11th straight month. 

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US inflation eased slightly in April but housing costs continue to drive price increases

By Jing Fu
NAHB – Eye on Housing
May 15, 2024
Category: Finance & Economics
Region: United States

Both overall and core inflation eased slightly in April amid higher costs for gasoline and shelter. On a year-over-year (YOY) basis, the shelter index rose by 5.5% in April, following a 5.7% increase in March. Despite a slowdown in the YOY increase, shelter costs continue to put upward pressure on inflation, accounting for nearly 70% of the total increase in all items excluding food and energy. This ongoing elevated and uneven inflation is likely to keep the Federal Reserve on hold and delay rate cuts this year. …The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.3% in April on a seasonally adjusted (SA) basis, after an increase of 0.4% in March. It marks the largest monthly increase since June 2009.

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US Housing Starts, Permits Fall Short as Mortgage Rates Rise in April

By Vince Golle
Bloomberg Economics
May 16, 2024
Category: Finance & Economics
Region: United States

New US home construction rose by less than forecast in April and permits for new activity dropped, suggesting the recent rise in mortgage rates is giving builders pause. Housing starts increased 5.7% to a 1.36 million annualized rate after downward revisions to prior months, according to government data released Thursday. The median forecast in a Bloomberg survey of economists called for a 1.42 million rate. Authorized permits for single-family home construction have now dropped for three straight months to the lowest level since August after trending higher toward the end of last year. That may constrain beginning home construction going forward. Building permits for all units, a proxy for future construction, fell 3% to a 1.44 million rate, the lowest since the end of 2022. That mostly reflected a large drop in authorizations for apartment complexes. …The number of completed single-family homes climbed to a 1.09 million annualized rate, the most since November 2022. 

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US Single-Family Permits Up in March 2024 (on a year-over-year basis)

by Danushka Nanayakkara-Skillington
NAHB – Eye on Housing
May 14, 2024
Category: Finance & Economics
Region: United States

Over the first three months of 2024, the total number of single-family permits issued year-to-date (YTD) nationwide reached 241,311. On a year-over-year (YoY) basis, this is an increase of 25.9% over the March 2023 level of 191,695. Year-to-date ending in March, single-family permits were up in all four regions. The range of permit increase spanned 38.0% in the West to 12.5% in the Northeast. …Between March 2024 YTD and March 2023 YTD, 47 states posted an increase in single-family permits. 

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Inputs to residential construction increased for the sixth consecutive month

By Jesse Wade
NAHB – Eye on Housing
May 14, 2024
Category: Finance & Economics
Region: United States

Inputs to residential construction, goods less food and energy, increased for the sixth consecutive month, according to the most recent producer price index (PPI) report published by the U.S. Bureau of Labor Statistics. …The non-seasonally adjusted index increased 0.14% in April after increasing a revised 0.50% in March and 0.47% in February. The index is up 2.77% from April 2023. …The seasonally adjusted PPI for softwood lumber increased 6.20% in April. This was the largest month-over-month increase since January of 2022 when the index shot up 21.56% over the month. From April of 2023, the index was 4.31% lower. …The non-seasonally adjusted PPI for gypsum building materials fell 0.74% in April. …The seasonally adjusted PPI for ready-mix concrete fell for the first time in four months, down 0.27% in April. …The non-seasonally adjusted PPI for steel mill products fell for the second straight month, down 2.67% for April after an 8.10% decline in March. 

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US Mortgage Rates Decrease for the First Time Since March

Freddie Mac
May 9, 2024
Category: Finance & Economics
Region: United States

MCLEAN, Verginia — Freddie Mac released the results of its Primary Mortgage Market Survey, showing the 30-year fixed-rate mortgage  averaged 7.09 percent. “After a five week climb, mortgage rates ticked down following a weaker than expected jobs report,” said Sam Khater, Freddie Mac’s Chief Economist. “An environment where rates continue to hover above seven percent impacts both sellers and buyers. Many potential sellers remain hesitant to list their home and part with lower mortgage rates from years prior, adversely impacting supply and keeping house prices elevated. These elevated house prices add to the overall affordability challenges that potential buyers face in this high-rate environment.”

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US Multifamily Developer Confidence Declines in First Quarter

By Eric Lynch
NAHB – Eye on Housing
May 9, 2024
Category: Finance & Economics
Region: United States

Confidence in the market for new multifamily housing declined year-over-year in the first quarter of 2024, according to results from the Multifamily Market Survey (MMS) released today by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index had a reading of 47, down three points year-over-year, while the Multifamily Occupancy Index had a reading of 83, up one point year-over-year. Multifamily developers are concerned about higher interest rates for construction and development loans, tight lending conditions that are taking place in the market right now, and difficulty with getting projects approved. While owners of existing apartments continue to report strong occupancy, this has the potential to soften in the near future given the number of units currently under construction. NAHB is currently projecting that multifamily starts will fall 28% this year.

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Paper Manufacturers Shift Grades—April 2024 Merger and Acquisitions Activity

By Mark Hahn
What They Th!nk
May 8, 2024
Category: Finance & Economics
Region: United States, International

In a classic bidding war that played out in the public markets, International Paper announced that it had prevailed over Mondi in the competition to land DS Smith. It was an about-face for the London-based DS Smith company. The Mondi and DS Smith boards were confident they had arrived at a final price and structure. In early March, they jointly announced an agreement for Mondi to acquire DS Smith in an all-share offer. Less than three weeks after the deal with Mondi was announced, US-based International Paper came roaring out of the sidelines and pushed Mondi out of the way with a stock-exchange offer for DS Smith valued at $7.2 billion. This deal is just one of many over the past several years as the paper industry sorts itself out, reduces its reliance on printing papers, and shifts to packaging grades. 

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US Fed on Hold with Limited Inflation Progress

By Robert Dietz
NAHB – Eye on Housing
May 1, 2024
Category: Finance & Economics
Region: United States

The Federal Reserve’s monetary policy committee held constant the federal funds rate constant at a top target of 5.5% at the conclusion of its April-May meeting. …Overall, the central bank continues to look for lower inflation readings, with the data having shown limited progress in recent months. Despite the ongoing policy pause, the current meeting did not tilt the Fed’s policy bias toward hawkishness. For example, Fed Chair Powell noted that an additional rate hike is all but ruled out. …With inflation data moderating at a slower than expected pace and economic growth remaining solid, forecasters are pushing back the timing and number of rate cuts expected for 2024. NAHB’s current forecast continues to call for two rate cuts during the second half of 2024. However, this may be reduced to just one dependent on incoming economic data.

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Boise Cascade reports Q1, 2024 net earnings of $104 million

By Boise Cascade Company
Business Wire
May 6, 2024
Category: Finance & Economics
Region: United States, US West

BOISE, Idaho — Boise Cascade reported net income of $104.1 million on sales of $1.6 billion for the first quarter ended March 31, 2024, compared with net income of $96.7 million on sales of $1.5 billion for the first quarter ended March 31, 2023. …Wood Products’ sales, including sales to Building Materials Distribution (BMD), increased $31.5 million, or 7%, to $468.9 million for the three months ended March 31, 2024, from $437.4 million for the three months ended March 31, 2023. The increase in sales was driven by higher sales volumes for I-joists and LVL, as well as higher plywood sales prices. …BMD’s sales increased $125.8 million, or 9%, to $1,505.0 million for the three months ended March 31, 2024, from $1,379.2 million for the three months ended March 31, 2023. Compared with the same quarter in the prior year, the increase in sales was driven by sales volume increases of 12%, offset partially by sales price decreases of 3%. 

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LP Building Solutions reports Q1, 2024 net income of $108 million

By Louisiana Pacific Corporation
Business Wire
May 8, 2024
Category: Finance & Economics
Region: United States, US East

NASHVILLE, Tennessee — Louisiana-Pacific, a manufacturer of building products, reported its financial results for the three months ended March 31, 2024. Highlights include: Siding net sales increased by 9% to $361 million; Oriented Strand Board (OSB) net sales increased by 65% to $313 million: Consolidated net sales increased by 24% to $724 million: Net income was $108 million, an increase of $85 million; and Adjusted EBITDA was $182 million, an increase of $116 million. “The first quarter saw robust demand for Siding and OSB, with increased volume,” said LP Chairperson and Chief Executive Officer Brad Southern. “While macro uncertainties remain, strong demand for SmartSide and Structural Solutions has continued in the second quarter. As such, we are increasing our second quarter and full-year outlook.”

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BlueLinx reports Q1, 2024 net income of $17 million

Bluelinx Holdings Inc.
May 3, 2024
Category: Finance & Economics
Region: United States, US East

ATLANTA — BlueLinx, a U.S. wholesale distributor of building products, reported financial results for the three months ended March 30, 2024. Highlights include: Net sales of $726 million; Net income of $17 million;  Adjusted net income of $19 million; and Adjusted EBITDA of $39 million, or 5.3% of net sales, which includes a net benefit of approximately $7 million related to import duties from prior periods. “We are off to a solid start to 2024, despite ongoing deflationary pressures associated with our specialty business and January weather conditions that adversely impacted volumes. We are pleased with the results for the quarter as volumes recovered and we maintained strong margins in specialty and structural products,” said Shyam Reddy, President, and CEO of BlueLinx.

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WestRock reports Q2, 2024 net income of $16 million

WestRock Company
May 2, 2024
Category: Finance & Economics
Region: United States, US East

ATLANTA — WestRock Company, a provider of sustainable paper and packaging solutions, announced results for its fiscal second quarter ended March 31, 2024. Second Quarter Highlights include: Net sales of $4.73 billion; Net income of $16 million, Adjusted Net Income of $101 million; net income included $81 million of restructuring and other costs, and Consumer Packaging Adjusted EBITDA margin increased 70 bps to 18.0%. …“We delivered strong results and made significant progress on our cost savings initiatives,” said David B. Sewell, CEO. …The decline in net sales compared to the second quarter of fiscal 2023 was driven primarily by a $229 million, or 8.7%, decrease in Corrugated Packaging segment sales, a $152 million, or 13.0%, decrease in Global Paper segment sales and a $152 million, or 12.0%, decrease in Consumer Packaging segment sales.

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UFP Industries reports Q1, 2024 net earnings of $121 million

By UFP Industries
Business Wire
April 30, 2024
Category: Finance & Economics
Region: United States, US East

GRAND RAPIDS, Michigan — UFP Industries announced first quarter 2024 results including net sales of $1.64 billion, net earnings attributable to controlling interests of $121 million. First Quarter 2024 Highlights include: Net sales of $1.64 billion decreased 10 percent due to a 9 percent decrease in selling prices and a 1% decrease in organic unit sales; New product sales of $124 million were 7.6% of total sales compared to 7.4% in the first quarter of 2023; Adjusted EBITDA1 of $181 million represents a decrease of 10 percent while adjusted EBITDA margin1 declined 10 basis points to 11%; and Net earnings attributable to controlling interests of $121 million represents a 4% decrease from last year and includes the favorable impact of a $9.7 million increase in an anticipated tax deduction.

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Suzano reports Q1, 2024 net income of US$43 million

By Suzano
Business Wire
May 9, 2024
Category: Finance & Economics
Region: International

SÃO PAULO, Brazil — Suzano, the world’s largest pulp producer, announced its financial results for the first quarter of 2024. The highlight of the period is the progress of the Cerrado Project, the largest ever capital investment project by the company. …The results also reflect the recovery trend of international pulp prices and stable production costs in relation to the previous quarter, as well as seasonal effects on sales in the sector. …Suzano registered net income of R$220 million [US$ 46 million]. Net debt ended the quarter at US$11.9 billion, including Suzano’s share buyback program and interest payments on equity during the quarter.

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UK Imports of timber and panel products remain generally low

The Construction Index – UK
May 7, 2024
Category: Finance & Economics
Region: International

Analysis by Timber Development UK (TDUK) shows that imports or main products groups are up by just 0.2% in the first two months of 2024, compared to the same period in 2023. Overall, however, volumes remain subdued in line with weaker construction output – particularly house-building – and a generally lacklustre economy. Softwood, hardwood, particleboard and MDF all experienced lower import volumes compared to the first two months of 2023, whereas plywood, OSB and engineered wood products are currently ahead of last year. Solid wood imports were 2% lower than in the first two months of 2023, while imports of panel products were nearly 5% higher, largely due to big increases in imported hardwood plywood driven by imports of eucalyptus-faced plywood from China. TDUK’s Nick Boulton said: “The UK tipped into a modest ‘mini’ recession, but this was thankfully shortlived, and economic indicators for 2024 have improved in recent months.

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China’s timber import market slowly recovering in Q1 2024

Globalwood.org
April 30, 2024
Category: Finance & Economics
Region: International

According to the latest data released by China’s General Administration of Customs, the country’s total timber imports exceeded US$3 billion in the first quarter of 2024, a decrease of 3.05% year-on-year, and a 4.2% increase in imports sequentially from the fourth quarter of 2023; the total volume of imports reached 15.56 million cubic metres, a decrease of 1.47% year-on-year, which was lower than the market’s expectations. …In March, imports increased by 4.7 per cent to 6.01 million cubic metres and the value of trade fell by 2.83 per cent to $1.254 billion. …Overall, the country’s timber imports in the first quarter of 2024 did not slip too much in total, as the import volume showed positive growth in March and the decline in January-February was lower than the market had expected, but it is still evident that the market recovery is proceeding slowly.

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