Lumber is a critical ingredient in new home construction, so interest rates influence the path of least resistance for wood prices. …Changes at the Fed favor lumber futures… the new Chairman, with the administration’s support, will likely favor reducing the rate from the current 3.625% over the coming months. Two factors favor lower rates. Inflation is currently below 3%, and the most recent Supreme Court ruling on tariffs could push inflation indicators even lower. …If the long-term rate follows short-term rates in 2026, demand for new 30-year mortgages and new homebuilding could increase, driving higher lumber demand and higher wood prices. …The daily continuous physical lumber futures contract chart highlights the bearish trend of lower highs. …I am bullish on lumber prices and expect them to break above the first resistance at $618.50, driven by seasonality and the prospects of falling U.S. interest rates.
Statistics Canada says the economy capped off a volatile year with a contraction in the final quarter of 2025. The agency said that real gross domestic product declined 0.6% on an annualized basis in the fourth quarter, falling short of expectations from the Bank of Canada and most economists for flat growth. Real GDP per capita was unchanged in the fourth quarter. StatCan said the main reason for the contraction was businesses drawing down their inventories. The economy swung back and forth between gains and losses every quarter last year as sharp changes in exports tied to US tariffs drove volatility in GDP data. …The agency said real GDP rose 1.7% in 2025 overall, cooling from 2% growth in each of the previous two years and marking the slowest pace of annual growth since 2016 outside the COVID-19 pandemic. “Lower exports, particularly to the United States, were the main contributor to the slower rise in GDP in 2025”.
Lumber futures fell toward $550 per thousand board feet, marking a six-week low, as a stagnant North American housing sector failed to absorb heavy seasonal inventories. Demand weakened as January data showed a 7% year over year drop in single family starts and an 8.4% decline in units under construction. High 6.25% mortgage rates and a 5.8% slump in Canadian home sales during January 2026 further stalled new project starts. On the supply side, regional inventory remained bloated. While BC curtailments continued harsh winter storms in the US South halted jobsite activity more than mill output, creating a distributor logjam and forcing aggressive dealer discounting to clear yard space. Additionally, while Trump’s administration 45% softwood duties were meant to buoy prices they instead stifled demand by adding nearly $17,500 to average home costs. This eroded the builder confidence needed to clear current supply.
The strong momentum and bull run of basic materials carried over into 2026 and appears poised to be the TSX’s top-performing sector for the second consecutive year. While mining heavyweights continue to lead the surge, lumber stocks are delivering market-beating returns. Stella-Jones, Canfor Corporation, and Doman Building Materials are worth watching right now. These companies offer operational leverage and have maintained resilience amid persistent price volatility and trade restrictions.
VANCOUVER, BC – Canfor Corporation announced today that it will record a non-cash asset write down and impairment charge totaling approximately $321 million in its fourth quarter of 2025 results. Of this amount, $215 million relates to the Company’s lumber segment and $106 million relates to its pulp and paper segment. In the lumber segment, the impairment is associated with the Company’s European operations and reflects ongoing log supply pressures in the region, which have resulted in significant increases in log costs and reduced asset carrying values. In the pulp segment, the impairment reflects sustained declines in global US-dollar pulp list prices as well as continued challenges in securing economically viable fibre necessary to support operations. This impairment charge is non-cash in nature and does not affect Canfor’s liquidity position, cash flows or day-to-day operations.
It’s been nearly a century since political economist Harold Innis popularized the phrase “hewers of wood and drawers of water” in decrying Canada’s dependence on natural resources. …Underpinning that cry is the (wrongheaded) assumption that natural resources such as mining, agriculture and energy are second-grade economic activity, less desirable than manufacturing. …That mistake is the foundation for many public policy blunders over many decades. The numbers demolish that myth, and tell a very different story, one in which energy, mining and other natural resources sectors create enormous economic value and are globally competitive. …The federal government needs to get itself out of the way of some of the strongest parts of the Canadian economy. Stop subsidizing inefficient sectors. Stop raising protective tariffs that harm other parts of the economy. Focus on rolling back unjustified regulatory barriers that harm the ability of the entire economy, particularly globally exposed natural resources sectors, to compete. And, most of all, stop the undervaluing Canada’s great natural advantage in natural resources. [to access the full story a Globe & Mail subscription is required]
Mortgage rates continued to decline in February, dipping below 6% in the last week of February. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.05% last month, 5 basis points (bps) lower than January. Meanwhile, the average 15-year rate declined only a basis point to 5.43%. Compared to a year ago, the 30-year and 15-year rates are lower by 79 bps and 60 bps, respectively. The 10-year Treasury yield, a key benchmark for long-term borrowing, held relatively steady for most of February with an average 4.18% – a marginal decrease of 2 bps from the previous month. However, yields fell significantly in the final week of February. …Following the recent escalation of conflict in the Middle East, the 10-year Treasury yield has shown signs of reversing course. Investors are closely monitoring how protracted the conflict may become and its potential implications for global energy markets. If oil prices rise significantly, inflation pressures could intensify, potentially pushing Treasury yields higher.
If enacted, the new legislation would aim to streamline tariff exclusions for goods used in home construction, help stabilize material pricing, and support efforts to expand housing supply nationwide U.S. Sens. Jacky Rosen (D‑NV) and Chris Coons (D‑DE) have introduced legislation aimed at easing construction costs and addressing America’s housing affordability crisis by excluding key homebuilding materials from tariffs imposed under the Trump administration. The Housing Tariff Exclusion Act would create a process to automatically exempt many building materials from current and future tariffs and allow importers to apply for exemptions on other essential construction inputs. The bill comes amid ongoing concerns that tariffs on imported materials such as lumber, steel, and other construction inputs have driven up costs for builders, contributing to higher home prices and exacerbating supply shortages. …The bill has garnered support from industry groups including the NAHB.
After falling below 6%, matching their lowest level in several years, mortgage rates reversed course Monday, hitting their highest point in two weeks. The average rate on the popular 30-year fixed loan rose 13 basis points to 6.12%, according to Mortgage News Daily. It had fallen to a recent low of 5.99% on Feb. 23 and pretty much sat there all week. The drop was welcome news as the all-important spring housing market gets underway. Potential buyers have been sidelined by high home prices and concerns over the broader economy. Mortgage rates crossing into the 5% range broke an emotional barrier for some, suggesting buyers might jump at the opportunity. Mortgage rates loosely follow the yield on the U.S. 10-year Treasury, which rose back above 4% on Monday. The growing conflict with Iran caused a spike in oil prices, raising inflation worries and pushing yields higher.
US equities tumbled on Tuesday, undoing a Monday equity comeback, as oil prices spiked again and traders began to worry the U.S.-Iran conflict could drag on longer than anticipated. The Dow Jones Industrial Average lost 1,238 points, or 2.5%. If that holds, it would mark the blue-chip index’s first 1,000-point decline since April 10, 2025. The S&P 500 slipped 2.2%, while the Nasdaq Composite was down 2.3%. Brent crude oil, the international benchmark, topped $84 a barrel, up 8% Tuesday following a 6% spike Monday. WTI crude jumped 8% to above $77 a barrel after a 6% jump as well on Monday. Iranian Revolutionary Guard commander said the Strait of Hormuz — the world’s most vital transit route for crude oil — is closed and that Iran would set ablaze ships attempting the route, Reuters reported, citing Iranian media.
US labor productivity in construction falls 30% from 1970 to 2024, while aggregate US labor productivity more than doubles over the same period, widening a long-running gap between construction and the wider economy. Since 1965, construction labor productivity falls by an average 0.6% per year, while economy-wide productivity grows about 1.6% per year, based on analysis by Goldman Sachs Global Investment Research. The analysis links part of the gap to limited innovation in construction equipment and processes after a period of faster adoption in the 1950s and 1960s. The share of industrial machines in total construction production costs rises from 4% in 1948 to 12% in 1968, then slips to 10% in the 1970s and stays near that level, while pre-fabrication’s share of new residential housing units falls from about one-third at its peak in 1960–1970 to 5%.
Contractors in certain niches can expect some meaningful materials price reductions after the Supreme Court struck down most of President Trump’s tariffs Friday. The court rejected Trump’s claim to authority to impose reciprocal tariffs. That would drive “a modest but meaningful reduction in materials price escalation” for specialty equipment, HVAC and electrical systems and fixtures, said Anirban Basu, chief economist at Associated Builders and Contractors. …But the administration quickly signaled plans for alternative tariff methods shortly after the ruling. AGC also noted other materials-specific tariffs on lumber, steel, aluminum and copper products are unaffected by Friday’s decision. Taken together, that means the Supreme Court decision “could be short-lived and completely counteracted,” said Basu. That back-and-forth tends to stall construction activity as owners and contractors weigh whether the decision will hold. …AGC has told builders not to hold their breath waiting for refund checks.
New residential construction in the US rose to a five-month high in December, as homebuilders boosted production to take advantage of lower borrowing costs. Housing starts increased 6.2% to an annual pace of 1.4 million homes in December, according to figures released Wednesday by the government, which were delayed by fall’s federal shutdown. …The advance was broad-based, with both single-family home starts and apartment projects rising at year’s end. The number of one-family homes started was the highest since February. The stronger construction numbers suggest that builders were growing more confident at year’s end even as they continued to sell off a bloated inventory of new houses. For the full year, however, starts notched a fourth-straight annual decline …In December, building permits, which point to future construction, rose 4.3% to an annualized pace of 1.45 million, the highest since March, government data show. Single-family permits fell slightly. [to access the full story a Bloomberg subscription is required]
Reality-television stars are rarely consulted on matters of public policy. But in April, Realtor.com asked Tarek El Moussa to comment on the White House’s “Liberation Day” tariffs. The Southern California entrepreneur, who rose to fame on the popularity of HGTV’s Flip or Fop franchise, warned that higher import taxes would harm “new-home builders” and “first-time buyers” the most — after all, “luxury buyers” could absorb greater costs. Aspiring homeowners, he averred, are “usually strapped for cash,” and “doing everything they can just to buy a house.” Now that the second Trump administration has passed its one-year anniversary, all evidence indicates that El Moussa understands his industry well. There is little doubt that his trade war erects a sizable obstacle before those looking to find a place of their own. …The types of wood available in the US are not always the same as what’s available from Canadian imports.
Real estate professionals active in the Los Angeles market are bracing themselves for another wave of tariff-induced uncertainty following the US Supreme Court’s ruling. …Despite the Feb. 20 ruling, President Donald Trump has been adamant that he will find other avenues to impose his tariffs. Trump’s tariff policies have already caused upheaval for local businesses, and now the country’s heightened situation with tariffs will further disrupt L.A.’s real estate market, according to experts across development, manufacturing and finance. “This is a very shifting landscape for American companies,” said Ken Calligar, founder of RSG 3•D. …Garret Weyand, at Cedar Street Partners, said, “If costs are too high because of these tariffs, then projects don’t get built.” Banks will likely make borrowers increase the amount of equity so that the bank is covered in the event tariffs and inflation raise project costs.
Logging and forest trucking industry added an estimated $1.3 billion to the Northeast region in 2024, with Maine contributing $534 million of that amount, according to a study released this week. Maine’s figure included $283 million in total labor earnings and an estimated $23 million in state tax revenues. The Pine Tree State numbers represented 2,744 direct logging and trucking jobs, along with an additional 1,715 indirect jobs, for a total of about 4,460 jobs statewide. The Augusta-based Professional Logging Contractors of the Northeast released the results of its first-ever regional study on Wednesday, conducted by Wallace Economic Advisers LLC. It showed that in 2024, logging and forest trucking supported around 6,930 jobs in the region, generated $393 million in labor income, pumped an estimated $61 million into state and local tax coffers, and remained critical to a range of industries and communities.
Japan’s housing starts fell 0.4% yoy in January 2026, easing from a 1.3% drop in the previous month and beating market expectations of a 1.6% decline. It marked the third consecutive month of contraction, though the pace was the mildest since July 2024. Rental housing starts declined at a slower rate (-1.5% vs -3.4% in December). Meanwhile, owner-occupied homes rebounded (6.6% vs -1.8%), as did prefabricated housing (5.1% vs -6.1%). Starts for two-by-four homes also accelerated (8.7% vs 2.8%). In contrast, built-for-sale housing fell 4.8%, reversing a 1.9% increase in December.
Drax Group Plc’s profit declined last year but exceeded analyst estimates, helping lift the shares to their highest level in almost two decades despite significant impairment charges. Adjusted earnings before interest, taxes, depreciation and amortization totaled £947 million ($1.3 billion), beating analyst estimates for £913.7 million. Citigroup Inc. analyst Jenny Ping cited lower pellet costs and record generation at its main biomass plant as supporting the result. The figure was still 11% lower than a year earlier, which Drax attributed to weaker power prices. The company’s share price rose as much as 6.2% to the highest since October 2006 before paring gains. …Drax reaffirmed its target of £600 million to £700 million of annual adjusted EBITDA after 2027 and said it expects 2026 earnings to align with analyst forecasts of about £662 million. The company also expects to return £1 billion to shareholders through dividends and share buybacks from 2025 until 2031, with £2 billion invested in growth areas.