Category Archives: Finance & Economics

Finance & Economics

Get ready for recession in Canada!

By Tristin Hopper
The National Post
May 16, 2023
Category: Finance & Economics
Region: Canada

A number of recent signals are pointing towards Canada — along with much of the world — being on the precipice of the good times coming to an end. There are many ways the next two years could play out, but they’re more likely than not to feature more strikes, more unemployment and more insolvencies. For one, Canada is already in the midst of a “per-capita recession.” …When considering that a stagnant economy is being shared among a population that is now three per cent larger, Better Dwelling found that per capita economic growth shrank 0.9 per cent in the last quarter of 2022, and then another 0.2 per cent from January to March. …While Canadian analysts generally hope that the economy can avoid the worst of whatever is to hit the United States, it’s likely that Canada has not yet felt the full brunt of hiked interest rates.

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Home Depot, after years of explosive growth, cuts its outlook as Americans cool spending on homes

By Michelle Chapman
The Capital Gazette
May 16, 2023
Category: Finance & Economics
Region: Canada, United States

After years of explosive growth during the pandemic, Home Depot’s revenue during the first quarter fell short of expectations and the company cut its profit and sales outlook for the year, sending shares skidding before the opening bell Tuesday. It was a rough start to a busy week of retail earnings and the numbers from the nation’s biggest home improvement chain dragged down retails stocks as well as the Dow. For the three months ended April 30, revenue dropped to $37.26 billion from last year’s $38.91 billion. Sales dropped 4.5%. …CEO Ted Decker said weak sales were mostly due to lumber deflation and bad weather, particularly in its Western division which had to contend with extreme weather in California. But the Atlanta company cut its expectations for the year with as shift in spending becomes more clear with the economy slowing and costs rising for builders and homeowners.

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Commodity prices likely to stay volatile as inflation and recession battle plays out

By Brian Donovan
The Globe and Mail
May 15, 2023
Category: Finance & Economics
Region: Canada

Will we have a soft landing with minimal economic impact or will we enter a recession leading to falling commodity demand and prices? The cumulative interest-rate increases, coupled with the recent failures of regional banks in the United States, have also led to a credit-tightening cycle – another recession harbinger. Copper has moved down 8 per cent. …Wheat prices dropped to a two-year low. …Lumber prices are back down to levels we have not seen since the COVID outbreak in 2020, at $339 per thousand board feet. …Companies have shifted to production curtailments over the past two years as a way to put a floor on prices and we are now well below the average cost of production for West Coast lumber ($450-$500 MFBM). If we have a soft economic landing, we could see a sharp rise in lumber prices later in the summer. [to access the full story a Globe & Mail subscription is required]

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RIP, Lumber-Futures Contract That Jumped During Covid-19

By Ryan Dezember
The Wall Street Journal
May 14, 2023
Category: Finance & Economics
Region: Canada, United States

The lumber-futures contract that soared during the pandemic and heralded the Covid building boom, broken supply chains and inflation will trade in its final session on Monday. The longtime barometer of wood prices and building activity is being retired and replaced with a new lumber-futures contract in an effort to boost trading. …To draw a larger pool of traders, the new futures contract represents a truckload of two-by-fours delivered to Chicago, instead of a train-car full sent to the British Columbia interior. The new futures also allow for eastern species. …The changes are meant to make trading in two-by-four derivatives a more useful tool for sawmills, builders and lumber yards to manage the risks involved in trading actual wood. At 27,500 board feet, instead of 110,000, each contract represents roughly the amount of lumber needed to build a house. Chicago is much closer to booming housing markets than Canada’s inland rainforest and as a delivery point much better approximates freight costs. [to access the full story a WSJ subscription is required]

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Canadian housing starts increased in April

By Canada Mortgage and Housing Corporation
Cision Newswire
May 15, 2023
Category: Finance & Economics
Region: Canada

OTTAWA – The standalone monthly seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada increased 22% in April (261,559 units) compared to March (213,780 units) according to Canada Mortgage and Housing Corporation (CMHC). The monthly SAAR of total urban starts increased 26%, with 241,585 units recorded in April. Multi-unit urban starts increased 33% to 201,621 units, while single-detached urban starts decreased 2% to 39,964 units. …The rural starts monthly SAAR estimate was 19,974 units. The trend in housing starts was 240,403 units in April, down 0.2% from 240,876 units in March. The trend measure is a six-month moving average of the monthly SAAR of total housing starts for all areas in Canada.

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Softwood lumber prices post strong gain in April

The Lesprom Network
May 11, 2023
Category: Finance & Economics
Region: Canada, United States

The U.S. lumber market experiences a positive shift as plywood and softwood prices show signs of stabilization and recovery in April. Plywood prices, which had seen a significant decline in the past, demonstrated resilience with a marginal decrease of 0.2% from March to April 2023. …Softwood lumber, another critical commodity, experienced an encouraging 6.2% increase in prices from March to April 2023. This notable rebound indicates a potential turning point after witnessing substantial declines in previous months. The start of the construction season supports the potential for price stabilization and recovery in the lumber market. As the weather improves and construction activities ramp up, the demand for lumber is expected to increase. …The positive shift in prices from March to April 2023 aligns with the broader trend of a modest increase in the Producer Price Index for final demand, which rose by 0.2% in April following a decline of 0.4% in March. 

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What’s next for a sluggish lumber market?

By Fergal McAlinden
Mortgage Professional America Magazine
May 12, 2023
Category: Finance & Economics
Region: Canada

Higher interest rates and rampant inflation saw activity in Canada’s housing market slow dramatically over the past year – and they’ve also had a big impact on cost and demand for construction materials, most notably lumber. …Wood business and market consultant Russ Taylor told Canadian Mortgage Professional that while lumber prices from British Columbia mills typically hovered somewhere around $450 per thousand board feet, they’d been below the $400 mark for most of the year to date, with little imminent prospect of an upturn. “BC mills have been operating at a loss pretty much since the start of the year,” he said. …The good news? As the weather gets better and spring continues, opportunities for housebuilding should increase, according to Taylor. “I think the second quarter is going to be the bottom for prices, anyway,” he said. 

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Conifex Timber reports Q1, 2023 loss, announces new president and COO

Conifex Timber Inc.
May 9, 2023
Category: Finance & Economics
Region: Canada, Canada West

VANCOUVER, BC – Conifex Timber reported results for the first quarter ended March 31, 2023. EBITDA was negative $6.9 million for the quarter compared to EBITDA of $20.1 million in the first quarter of 2022. Net loss was $8.1 million or $0.20 per share for the quarter versus net income of $11.4 million or $0.28 per share in the year-earlier quarter. The results reflect reduced operating earnings on lower lumber prices and reduced shipments reflecting transportation challenges which impacted lumber production.

…Conifex  announced that Andrew McLellan has been promoted to President and Chief Operating Officer. As President, Andrew will lead Conifex’s business units and pursue value-added opportunities in fibre procurement, lumber manufacturing and marketing, green power generation, and other complementary businesses. Andrew retains responsibility for forest sustainability, safety, and environmental compliance, and will continue to report to Ken Shields, Chairman and CEO. …Andrew began his forestry career in 1997 with Northwood Pulp and Timber which was later acquired by Canfor in 1999.

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Stella-Jones updates its financial objectives building on sustained growth

Stella-Jones Inc.
May 24, 2023
Category: Finance & Economics
Region: Canada, Canada East

Montreal, Quebec—Stella-Jones Inc. today updated its three-year objectives, reflecting the years 2023–2025. The Company will be featuring its new financial targets at its Investor Day, being held this morning in Toronto, Ontario. “Following a record year in 2022, coupled with our outstanding start to 2023, we are excited to share updated financial objectives that reflect Stella-Jones’ performance and growth potential,” said Eric Vachon, President and Chief Executive Officer of Stella-Jones. “In light of our favourable position to meet or exceed our original financial targets, we are raising our 2025 sales target to almost 20% above 2022 sales and the 2023–2025 EBITDA margin goal to 16%, primarily driven by the accelerating demand for our higher margin utility poles business. …Our inaugural investor day today sets the stage for us to share our new targets and build on what we believe is a defining time for us and for the essential infrastructure businesses we serve.”

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GreenFirst Forest Products reports Q1, 2023 loss

By GreenFrist Forest Products Inc.
Businesswire
May 15, 2023
Category: Finance & Economics
Region: Canada, Canada East

TORONTO — GreenFirst Forest Products announced results for the first quarter ended April 1, 2023. First quarter 2023 net loss from continuing operations was $20.2 million compared to net loss of $25.9 million in the fourth quarter of 2022. Lumber prices dropped, reflecting economic headwinds and lower demand in Q1 2023, with an average selling price of $605/mfbm compared to $644/mfbm in Q4 2022. …Sold its two Quebec mills for gross proceeds of $94.1 million, subject to working capital adjustments, at a $3.5 million loss on disposal. …”We have strengthened our balance sheet and our recent efforts to improve operational efficiencies have begun to yield positive results,” said Paul Rivett, interim CEO. 

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Cascades reports Q1, 2023 results

By Cascades Inc.
Cision Newswire
May 11, 2023
Category: Finance & Economics
Region: Canada, Canada East

KINGSEY FALLS, Quebec — Cascades Inc. reported its unaudited financial results for the three-month period ended March 31, 2023. Highlights include:  Sales of $1,134 million (compared with $1,135 million in Q4 2022 and $1,038 million in Q1 2022); Operating loss of $(80) million (compared with $(20) million in Q4 2022 and $(4) million in Q1 2022); and Adjusted earnings before interest, taxes, depreciation and amortization of $134 million (compared with $116 million in Q4 2022 and $58 million in Q1 2022) …Mario Plourde, President and CEO, commented: “All three businesses contributed to topline growth year-over-year, as benefits from higher selling prices and an advantageous exchange rate more than offset the impacts of a less favourable mix in Containerboard and lower volumes in Tissue Papers and Specialty Products.”

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KP Tissue reports Q1, 2023 results

By KP Tissue Inc.
The Market Screener
May 11, 2023
Category: Finance & Economics
Region: Canada, Canada East

MISSISSAUGA, Ontario — KP Tissue reports the Q1 2023 financial and operational results of KPT and Kruger Products Inc. Highlights include: Revenue was $451.0 million in Q1 2023 compared to $398.7 million in Q1 2022, an increase of $52.3 million or 13.1%; Adjusted EBITDA1 was $50.0 million in Q1 2023, compared to $29.1 million in Q1 2022, an increase of 71.9%; Net loss was $49.3 million in Q1 2023 compared to net income of $1.4 million in Q1 2022, a decrease of $50.7 million. …KP Tissue’s Chief Executive Officer, Dino Bianco. “Adjusted EBITDA increased nearly 72% year-over-year to $50 million on improved revenue of $451 million in the first quarter. 

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Stella-Jones reports positive Q1, 2023 results

Stella-Jones Inc.
May 10, 2023
Category: Finance & Economics
Region: Canada, Canada East

MONTREAL, Quebec — Stella-Jones announced financial results for its first quarter ended March 31, 2023. Highlights include sales of $710 million, 18% organic sales growth in infrastructure-related businesses, record EBITDA of $120 million, and net income of $60 million up 41% from Q1, 2022. …“The Company had an excellent start to the year, propelled by the momentum of our growth in 2022,” said Eric Vachon, President and CEO. “Our record results in Q1 featured strong sales, higher EBITDA and margin, and were marked by an out-performance of our utility poles product category, which saw a 29% sales increase. Our first quarter results also reflected steady sales growth in railway ties, aligned with our expectations for this product category, and an anticipated pullback in residential lumber sales compared to 2022.”

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US real GDP increased 1.3% in the first quarter of 2023

US Bureau of Economic Analysis
May 25, 2023
Category: Finance & Economics
Region: United States

Real gross domestic product (GDP) increased at an annual rate of 1.3% in the first quarter of 2023, according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.6%. The GDP estimate released is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 1.1%. …The increase in real GDP reflected increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

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New Single-Family Home Size Trending Lower

By Robert Dietz
NAHB – Eye on Housing
May 22, 2023
Category: Finance & Economics
Region: United States

An expected impact of the virus crisis is a need for more residential space, as people use homes for more purposes including work. Home size correspondingly increased in 2021 as interest rates reached historic lows. However, as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower. According to first quarter 2023 data from the Census  and NAHB analysis, median single-family square floor area registered at 2,261 square feet. Average (mean) square footage for new single-family homes stood at 2,469 square feet. Since Great Recession lows (and on a one-year moving average basis), the average size of a new single-family home is now 4% higher at 2,486 square feet, while the median size is 7% higher at 2,262 square feet.

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Lowe’s cuts full-year sales forecast, as spending on do-it-yourself projects weakens

By Melissa Repko
CNBC News
May 23, 2023
Category: Finance & Economics
Region: United States

Lowe’s cut its full-year outlook Tuesday, as lumber prices fell and do-it-yourself customers bought fewer items. The home improvement retailer’s lowered its forecast even as it beat Wall Street’s revenue and earnings expectations for the fiscal first quarter. CEO Marvin Ellison said lumber deflation, unfavorable weather and lower spending by DIY customers hurt quarterly sales. He said the company expects “a pullback in discretionary consumer spending over the near term.” …Here’s what the company reported for the three-month period ended May 5: Revenue: $22.35 billion vs. $21.6 billion expected; Net income for the three-month period was $2.26 billion, compared with $2.33 billion. …Lowe’s competitor, Home Depot, posted a rare revenue miss with its quarterly report last week. …Like Lowe’s, Home Depot also chalked up lower sales to colder and wetter weather in the western U.S. and falling lumber prices.

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US Leading Economic Indicator declines again in April, continues to warn of an economic downturn

The Conference Board
May 18, 2023
Category: Finance & Economics
Region: United States

The Conference Board Leading Economic Index® (LEI) for the U.S. declined 0.6% in April 2023 to 107.5 (2016=100), following a decline of 1.2% in March. The LEI is down 4.4% over the six-month period between October 2022 and April 2023—a steeper rate of decline than its 3.8% contraction over the previous six months (April–October 2022). “The LEI for the US declined for the thirteenth consecutive month in April, signaling a worsening economic outlook,” said Justyna Zabinska-La Monica, at The Conference Board. “Weaknesses among underlying components were widespread—but less so than in March’s reading, which resulted in a smaller decline. Only stock prices and manufacturers’ new orders for both capital and consumer goods improved in April. Importantly, the LEI continues to warn of an economic downturn this year. The Conference Board forecasts a contraction of economic activity starting in Q2 leading to a mild recession by mid-2023.”

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US Custom Home Building Contracts

By Robert Dietz
NAHB – Eye on Housing
May 19, 2023
Category: Finance & Economics
Region: United States

NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building gained market share during recent quarters but experienced a notable drop for construction starts at the beginning of 2023. There were 36,000 total custom building starts during the first quarter of the year. This marks a 22% decline compared to the first quarter of 2022, matching weakness experienced throughout the home building sector. Over the last four quarters, custom housing starts totaled a solid 204,000 homes, a flat reading compared to the prior four quarter total (205,000).

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Economy Still Expected to Slow, but Housing Construction Looking More Upbeat

Fannie Mae
May 19, 2023
Category: Finance & Economics
Region: United States

Our economic forecast is little changed from last month. …Both the April employment and Consumer Price Index (CPI) reports came in close to our expectations, and the Federal Reserve delivered an anticipated 25 basis point rate hike at its last meeting. Therefore, our outlook remains largely unchanged, including our expectation of a modest recession beginning in the second half of this year. …We now project real GDP growth on a Q4/Q4 basis in 2023 to be negative 0.3 percent, up one-tenth from our prior outlook. For 2024, we have downgraded growth by two-tenths to 1.2 percent. We forecast the unemployment rate to move upward to 4.2 percent by year-end and to rise to 5.3 percent by the end of 2024. Along with a slowing economy, we also forecast inflation to continue to decelerate, with headline and core CPI ending 2023 around 3.0 and 4.0 percent on a Q4/Q4 basis, respectively.

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US Housing Starts Rise in Sign Home Construction Is Stabilizing

By Augusta Saraiva
Bloomberg Investing
May 17, 2023
Category: Finance & Economics
Region: United States

US housing starts increased in April, adding to evidence that residential real estate is gradually recovering after a yearlong slump. Beginning home construction rose 2.2% to a 1.4 million annualized rate, according to government data released Wednesday. Single-family homebuilding increased 1.6% to the highest level this year, entirely due to a jump in the West. Starts of apartment buildings and other multifamily projects also rose. Applications to build, a proxy for future construction, fell 1.5% to an annualized rate of 1.42 million units. Permits for one-family dwellings, however, increased to a seven-month. …Builders are taking advantage of an historically low supply of existing homes for sale and some are offering financing incentives to ease affordability constraints amid budding demand for new houses. That helps explain why homebuilder sentiment currently stands at a 10-month high.

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Boomers and millennials fight for homes as housing market cools

By Adam Barnes
The Hill
May 17, 2023
Category: Finance & Economics
Region: United States

Prices have cooled in the once red-hot housing market, but competition is heating up between two generations in seemingly perpetual conflict. Millennials entering their prime homebuying years and baby boomers — many of whom are nearing retirement age — are vying for the same homes. Not all baby boomers are looking for smaller properties to spend their retirement years, and some millennials are encroaching on space in the suburbs, where their older peers would typically downsize. But most boomers have a key advantage: substantial equity from previous home purchases and higher incomes, which help them avoid the growing costs of a long-term mortgage. “Boomers are not downsizing and Millennials — first-time buyers in particular — are buying later in life. This puts both generations of buyers in head-to-head competition for similarly sized properties,” Jessica Lautz, at the National Association of Realtors.

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Lack of Existing Inventory Boosts Builder Confidence For the Fifth Straight Month

By Robert Dietz
NAHB – Eye on Housing
May 16, 2023
Category: Finance & Economics
Region: United States

Limited existing inventory, which has put a renewed emphasis on new construction, resulted in a solid gain for builder confidence in May even as the industry continues to face several challenges, including building material supply chain disruptions and tightening credit conditions for construction loans. Builder confidence in the market for newly built single-family homes in May rose five points to 50, according to the NAHB/Wells Fargo Housing Market Index (HMI). This marks the fifth straight month that builder confidence has increased and is the first time that sentiment levels have reached the midpoint mark of 50 since July 2022. New home construction is taking on an increased role in the marketplace because many home owners with loans well below current mortgage rates are electing to stay put, and this is keeping the supply of existing homes at a very low level. 

In related NAHB news: Single-Family Starts Show Gradual Improvement in April

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US single-family homebuilding, permits rise in April

By Lucia Matikani
Reuters
May 17, 2023
Category: Finance & Economics
Region: United States

WASHINGTON – U.S. single-family homebuilding increased in April, but data for the prior month was revised sharply lower, suggesting that the housing market slump was far from over even as some segments show signs of stabilizing. The rise in single-family housing starts last month reported by the Commerce Department on Wednesday was concentrated in the West, with the rest of the three regions reporting big declines. Shortages of some materials were likely hampering builders, with the homebuilding backlog surging and completions declining. Single-family housing starts, which account for the bulk of homebuilding, rose 1.6% to a seasonally adjusted annual rate of 846,000 units last month. Data for March was revised down to show single-family homebuilding falling to a rate of 833,000 units instead of increasing to a pace of 861,000 units as previously reported. …But single-family building permits rose 3.1% to a rate of 855,000 units in April, the highest level since last September.

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US Woodchip Exports Up 40% Thanks to Growing Asian Demand

By Håkan Ekström
Forests2Market Blog
May 16, 2023
Category: Finance & Economics
Region: United States

Asia has increased its share of global wood pellet imports to a record 32%. Worldwide trade of wood pellets was practically unchanged year-over-year compared to 2022. This was the first-time shipments failed to rise since 2017 when wood pellets became a globally traded commodity. …Asia, represented by Japan and South Korea, has continued to grow import volumes at the expense of European buyers. In 4Q 2022, this accounted for one-third of the world’s import volume—up from only 18% five years ago. Demand for biomass, including wood pellets, has increased remarkably quickly in Japan. …Japan will be the fastest-growing market in the world in the next 5-10 years. …The US’s woodchip exports have increased by about 40% in the past two years to reach an all-time high in 2022. The overseas shipments represented 73% of total shipments, up from 45% in 2020 and driven by higher demand for softwood fiber by Asian pulpmills.

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Cautious optimism rules the windows and doors market

By Mike Berger
The LBM Journal
May 11, 2023
Category: Finance & Economics
Region: United States

While statistics spark fear in some, others see opportunity. “There are definite signs of new construction slowing, but we anticipate this will not have any significant negative impact on the remodeling segment,” says Phil Wengerd for ProVia. “Despite the rise in interest rates a few months back, consumers are still spending money on their homes.” “The current shortage of new housing inventory, however, will eventually necessitate new construction starting back up again,” he points out. “The surge of remodeling projects that occurred while folks were working remotely… has subsided, but home improvement investments are still strong.” …While nothing is a given, when taken as a whole, insights from door and window manufacturers seem to suggest a positive—if somewhat cautious—optimism. Improvements in the supply chain, coupled with a potential uptick in new housing starts as the year progresses, all spell potential wins for LBM dealers. 

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Building Materials Prices Decline in April Despite Increased Lumber Costs

By David Logan
NAHB – Eye on Housing
May 11, 2023
Category: Finance & Economics
Region: United States

According to the latest Producer Price Index report, the prices of inputs to residential construction less energy (i.e., building materials) decreased 0.2% in April 2023. The index has gained 0.5%, year-to-date, which is the smallest April YTD increase since it climbed 0.3% over the first four months of 2020. …The PPI for gypsum building materials fell 1.1% in April after increasing in February and March. …The PPI for softwood lumber (seasonally adjusted) increased 6.2% in April–the first increase since July 2022 and just the second since March 2022. Prices have increased 0.9% YTD but are 40.1% lower than they were one year ago. …Ready-mix concrete prices increased 0.4% in April after climbing 0.9% in March. …Steel mill products prices increased 3.1% in April after climbing 3.1% in February and March combined. …The price of truck and deep sea (i.e., ocean) transportation of freight decreased 1.7% and 0.4%, respectively, in April while the PPI for rail freight increased 0.4%. 

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Labor conditions are improving but still impacting project costs and timelines

By Vincent Salandro
Builder Online
May 10, 2023
Category: Finance & Economics
Region: United States

While labor availability has improved in the past year, shortages in skilled labor continue to impact both project costs and timelines, according to the Q2 2023 U.S. Houzz Renovation Barometer. Approximately 79% of businesses surveyed by Houzz reported “moderate to severe” labor shortages in the second quarter of 2023, an improvement from 91% of respondents during hte same period last year. Houzz says the decrease in businesses reporting labor shortages may reflect an overall decline in business activity levels. New committed projects reported at the start of the year have decreased by five index points relative to the third quarter of 2022, according to Houzz. 42% of industry professionals reported moderate to severe shortages of carpenters, an improvement from 56% in 2022. Over a quarter of respondents reported shortages of electricians, plumbers, cabinetmakers, and framers, though all represented an improvement from labor conditions in the second quarter of 2022.

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US Inflation Falls Below 5% For First Time in Two Years

By Fan-Yu Kuo
NAHB – Eye on Housing
May 10, 2023
Category: Finance & Economics
Region: United States

Consumer prices in April saw the smallest year-over-year gain since April 2021. This marked the tenth consecutive month of deceleration and the first time the rate has fallen below 5% in two years. While the shelter index (housing inflation) experienced its smallest monthly gain since January 2022, it continued to be the largest contributor to the total increase, accounting for over 60% of the increase in all items less food and energy. The Fed’s ability to address rising housing costs is limited as shelter cost increases are driven by a lack of affordable supply and increasing development costs. Additional housing supply is the primary solution to tame housing inflation. The Fed’s tools for promoting housing supply are at best limited. In fact, further tightening of monetary policy will hurt housing supply by increasing the cost of AD&C financing. 

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Remodelers undertake projects to allow homeowners to Age-in-Place

By Eric Lynch
NAHB – Eye on Housing
May 9, 2023
Category: Finance & Economics
Region: United States

The NAHB’s Remodeling Market Index survey has asked questions about Aging-in-Place (AIP) periodically, beginning in 2004. According to results from the Q1 2023 survey, 63 percent of professional remodelers undertake projects designed to allow homeowners to Age-in-Place, down from 77 percent in Q4 2018. …Ninety-eight percent of remodelers cited that most or some of their consumers are familiar with the Aging-in-Place concept. …Grab bars are the most common AIP project, with 93 percent of remodelers reporting this job in the last year. They are followed by curb-less shower at 83 percent, installing higher toilets at 77 percent, widening doorways at 63 percent, and adding lighting/task lighting at 49 percent. Seventy-six percent of remodelers indicated that requests for Aging-in-Place features have significantly or somewhat increased over the past 5 years.

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Decline in lumber prices reduces DIY company growth rates in the US

DIY International
May 9, 2023
Category: Finance & Economics
Region: United States

The “Construction Supply 150 (CS150) study by Webb Analytics attributes last year’s comparatively low growth rates at Home Depot, Lowe’s and other DIY groups in the USA to lower lumber prices. “Prices paid at the mill for major lumber species dropped 62 to 73 per cent between January and December last year,” noted Craig Webb, president of Webb Analytics and the author of CS150. “Much of the CS150 was affected – even giants like Home Depot, which posted only a 4.3 per cent rise, in part because lumber sales rose 0.8 per cent in 2022 compared with 18 per cent a year before.” The 4.3 per cent growth rate in 2022 refers to Home Depot’s operations in the US, excluding Canada and Mexico. Lowe’s’ growth in the US is 1.8 per cent, according to the report. [END]

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US wood pellet exports up in March

By Erin Voegele
Biomass Magazine
May 5, 2023
Category: Finance & Economics
Region: United States

The U.S. exported 909,787 metric tons of wood pellets in March, up from both 632,044 metric tons exported in the previous month and 801,396 metric tons exported in March 2022, according to data released by the USDA Foreign Agricultural Service on May 4. …The U.K. was the top destination for U.S. wood pellet exports at 366,798 metric tons, followed by the Netherlands at 256,478 metric tons and Japan at 102,742 metric tons. The value of U.S. wood pellet exports reached $169.43 million in March, up from $117.99 million in February and $127.33 million in March of last year. Total U.S. wood pellet exports for the first quarter of 2023 reached 2.18 million metric tons a value of $402.08 million, compared to 2.09 million metric tons exported during the same period of last year at value of $312.69 million.

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Timber Producers Expecting Stronger Demand for Lumber, California Farm Bureau Reports

By Christine Souza
Sierra Sun Times
May 22, 2023
Category: Finance & Economics
Region: United States, US West

Timber and forest products sector leaders and market analysts say warmer temperatures mean a return to a more typical seasonal demand as construction and home improvement projects resume after the winter slowdown. They say the timber market should fare reasonably well this year, despite rising interest rates affecting new home purchases. Lumber market analyst Rocky Goodnow, of Forest Economic Advisors, said… “We’re starting to see positive signs for demand in housing starts, and we continue to see strong numbers on the repair and remodeling side.” Goodnow said he expects the U.S. economy to enter a recession in late 2023. But he said the timber sector may be able to withstand a potential downturn. …After three years of drought and devastating wildfires, Steven Brink, California Forestry Association vice president of public resources, said snow and rain this winter is positive for improved forest health.

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The Future of Pulp and Paper Investments in the Pacific Northwest

Forest2Market Blog
May 17, 2023
Category: Finance & Economics
Region: United States, US West

Within the last five years, over a billion dollars have been invested in various projects in the Pacific Northwest (PNW). Some of these recent investments include: Roseburg’s plan to upgrade and expand its manufacturing operations in Southern Oregon; Drax’s investment in a 450kt new-build pellet plant in Longview; and North Pacific Paper’s expanded Longview facility. Does this mean the PNW is a profitable area for pulp and paper investments? The reality is actually quite the opposite for many. …Timber supplies in the PNW remain stressed due to lack of harvesting on federal lands. …Log exports in the region have also decreased significantly. …As a result of all these combined factors, we’re seeing a tightening of supply for logs and fibers. Consequently, there have been multiple pulp mill closures in the area. …The PNW isn’t all doom and gloom. There are two major factors that appeal.

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Southern Yellow Pine Lumber Prices Steady as Housing, Manufacturing Improves

Forests2Market Blog
May 24, 2023
Category: Finance & Economics
Region: United States, US East

SYP lumber prices have held somewhat steady across 2023 thus far. Price variance is far below the meteoric rises and falls of 2022 and 2021. Some slowing down of contraction within housing and manufacturing has likely played a role in this steadier-paced pricing. …Overall, we forecast total starts in 2023 to fluctuate to a -14.4% average relative to 2022. 2024 numbers will hit a +4.7% increase from 2023, and January-April 2025 levels will keep rising to +10.8% YTD from the year prior. Manufacturing construction is slowing down… the Institute for Supply Management’s (ISM) monthly sentiment survey of U.S. manufacturers reflected slower erosion in the sector during April. …In the forest products sector, numbers came down rather mixed:

  • Pulp, Paper & Allied Products +3.5% year-over-year (no change)
  • Lumber & Wood Products -0.5% (-18.3% year-over-year)
  • Softwood Lumber: -0.9% (‑49.3% year-over-year)
  • Wood Fiber: +1.1% (-0.7% year-over-year)

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Shares of wood pellet maker Enviva plummet as losses widen

By David Boraks
WFAE Charlotte, North Carolina
May 5, 2023
Category: Finance & Economics
Region: United States, US East

NORTH CAROLINA — Enviva, the world’s largest maker of wood pellets with four plants in North Carolina, saw its stock price plummet this week after it canceled its dividend and told investors it expects bigger losses to come. Enviva’s shares fell about 60% after Wednesday’s announcements. The Maryland-based company posted a bigger-than-expected loss for the first three months of 2023 as European customers delayed pellet orders and expenses ballooned for unplanned repairs and maintenance. CEO Thomas Meth acknowledged it was a disappointing start to the year. “Our results this quarter were much softer than we expected. Mainly driven by (a) cost position that is not acceptable. But we believe it can be remedied in the short term,” Meth said. Enviva said it now expects a larger-than-expected loss for the full year. To save money, it will stop paying a dividend to shareholders, though it promised to buy back shares.

Related coverage in The Motley Fool: Why Enviva Stock Is Up Today

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What’s behind the rise in timber prices and what does it mean for Australia’s building sector?

By Jonathan Barrett
The Guardian UK
May 22, 2023
Category: Finance & Economics
Region: International

AUSTRALIA — Australian timber prices may have fallen from their Covid pandemic spikes but the respite might be short-lived, creating a headache for the critical housing sector and its role in helping address a severe shortfall in new homes. The housing industry is being hit by opposing forces, with rising interest rates designed to cool demand at the same time as a housing shortage stirs it. An impending resumption of the timber export trade to China is also raising questions over whether Australia has enough local supplies to meet its own requirements. …Two big forces are crashing against each other. Developers are holding off building tens of thousands of homes across Australia, despite already gaining planning approval, because of high construction costs. …“Australia needs one billion new timber trees planted to meet growing future demand,” the Australian Forest Products Association says.

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Suzano CEO on trading with China, pulp prices and pending recession

By Dayanne Sousa
Bloomberg Markets in Yahoo! Finance
May 9, 2023
Category: Finance & Economics
Region: International

Walter Schalka

Suzano SA, the biggest producer of hardwood pulp, is considering selling its products to China priced in yuan, adding to signs that the dollar is losing its dominance in commodity markets. What’s the outlook for global pulp markets? We are very used to volatility in pulp prices and right now prices are below the marginal cost of many producers in the world. We do not believe that is a sustainable situation. A lot of integrated players are scaling down their production of pulp and buying from non-integrated players. This situation will drive, in a matter of few months, the price to go back up again. What suggests we’re heading into a recession? The tissue business globally is very stable. On printing and writing papers, the US has a little bit of weak signals. China is performing well and Europe is in a worse situation: the market is going down. Perhaps we are starting to see recession in Europe, in early stages, compared with other regions.

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Dive in log prices making harvesting uneconomic

Radio New Zealand News
May 8, 2023
Category: Finance & Economics
Region: International

Logging exporters are being blamed for the current dive in log prices to a level where harvesting is uneconomic. Between March and April log prices dropped 14 percent to $112 – $115 for an A-grade log. Laurie Forestry managing director Allan Laurie said prices needed to be “north of $120” to be economic for harvesters. Laurie said the situation, which had happened before, was incredibly frustrating because it was predictable and avoidable. He said it was obvious months ago that China’s usual seasonal increase in consumption was not happening, with the market signals pointing to China’s construction boom ending. …Laurie said the drop in demand had pushed prices down to levels where forest owners should shut their gates. …Laurie said the contractors and forest workers needed to be considered much more in the equation. …Laurie is recommending “a sit-down review amongst key players” to implement a strategic approach to “scour the planet for more markets”.

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North American lumber market anticipating effects of catastrophic wildfires in Canada

Madison’s Lumber Reporter in Lesprom
May 23, 2023
Category: Finance & Economics

The seemingly never-ending winter of 2022/23 had barely moved into spring when an enormous amount of forest fires broke out in Alberta, Canada. …Both road and rail transport lanes near Edson, Alberta, saw immediate negative effects from the fires. The town of Fox Creek, including the Canfor sawmill there, are also evacuated. This is a brand-new occurrence; never before have such a large number of such severe wildfires broken out so early in the season in an important timber supply area of North America. …In the week ending May 12, 2023, the price of benchmark softwood lumber item Western Spruce-Pine-Fir 2×4 #2&Btr KD (RL) was again US$360 mfbm, which is flat from the previous week, said weekly forest products industry price guide newsletter Madison’s Lumber Reporter. This is up by +$9, or +2%, from one month ago when it was $351.

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Doman Building Materials reports Q1, results

By Doman Building Materials Group Ltd.
GlobeNewswire in the Edmonton Journal
May 11, 2023
Category: Finance & Economics

VANCOUVER, British Columbia — Doman Building Materials Group announced its first quarter 2023 financial results for the period ended March 31, 2023. For the three-month period ended March 31, 2023, consolidated revenues amounted to $609.1 million, compared to $851.3 million in the same period in 2022. The decrease in revenues is largely due to the impact of construction materials pricing, which peaked in the comparative period in 2022. …EBITDA amounted to $44.8 million, compared to $78.1 million in the same period in 2022. …The Company declared a $0.14 per share. “Despite the impact of a highly volatile pricing environment, we are pleased with the strength in our gross margin,” said Amar Doman, Chairman of the Board.

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