Category Archives: Finance & Economics

Finance & Economics

Tariffs Could Add $3B to $4B to the US Home Building Costs

NAHB.org
January 27, 2025
Category: Finance & Economics
Region: Canada, United States, International

Scarcity and an acute, sustained rise in building material costs — from softwood lumber to distribution transformers — are driving up the cost to construct homes and harming housing affordability. There are several factors driving this trend, notably inflationary pressures and global factors, including trade uncertainty. …A tariff is essentially a tax on an imported good, meaning the importer pays an additional cost for importing such an item. …So tariffs on building materials raise the cost of housing, and consumers end up paying for the tariffs in the form of higher home prices. Two essential materials used in new home construction, softwood lumber and gypsum (used for drywall), are largely sourced from Canada and Mexico, respectively. Proposed new tariffs on China, Canada and Mexico are projected to raise the cost of imported construction materials by $3 billion to $4 billion, depending on the specific rates.

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Tariff uncertainty hangs over Bank of Canada’s 1st rate decision of 2025

By Craig Lord
Global News
January 27, 2025
Category: Finance & Economics
Region: Canada

The Bank of Canada is being pulled in a few different directions ahead of its first interest rate decision of the year on Wednesday. On one hand, there are signs of trouble bubbling up in underlying inflation that could make an argument for keeping borrowing costs higher for longer. On the other: Donald Trump has reiterated threats to impose tariffs of 25% on Canadian goods that could be set to take effect mere days after the central bank’s rate decision. …A trade blow like that would normally push the Bank of Canada towards steeper rate cuts in a bid to salvage economic growth. But dropping rates too quickly at a time when the loonie is already struggling risks fuelling more inflation on imports from the US. Economists say they’re betting the Bank of Canada will go ahead with another cut.

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Lumber prices remain flat through the start of 2025 amid uncertainty

By Joe Pruski
RISI Fastmarkets
January 24, 2025
Category: Finance & Economics
Region: Canada, United States

Trends in many framing lumber markets were unchanged amid persistent uncertainty regarding tariffs and frigid temperatures across much of the US. …Western Canadian producers sold cautiously while awaiting clarity on potential tariffs. Buyers had few immediate needs and were content operating with lean inventories despite the threat of volatility. Prices were little changed in overall dull trading. Lumber futures tracked a similar course in terms of interest, but downside was evident as the large premium in the front month eroded. The board fell each day week to date. Meanwhile, subfreezing temperatures across the South and historic snowstorms along the Gulf Coast brought Southern Pine trading to a near standstill. Traders operated with widely diverse views of whether President Trump’s threats of tariffs of up to 25% on Canadian imports as early as February 1 will actually become a reality.

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Chemicals industry, freight rails brace for Trump tariffs on Canada, Mexico

By Lori Ann LaRocco
CNBC News
January 22, 2025
Category: Finance & Economics
Region: Canada, United States

U.S. trade with Canada and Mexico is back in Trump’s crosshairs with the tariff threat. …Much of the focus has centered on autos but Canada is also the top trading partner of the U.S. for critical chemicals, an industry now bracing for the potential impact. …Mineral firms in Canada are considered domestic sources under Title III of the Defense Production Act and have received U.S. federal funding for critical minerals projects in Canada. …Canada is also the largest supplier of U.S. energy imports, including crude oil, natural gas, and electricity. …Rand Ghayad, chief economist at the Association of American Railroads, said the interconnected rail network between the U.S. and Canada is a cornerstone of North American trade, underpinning economic growth and supply chain resilience. …The inflationary effects from tariffs will take some time to materialize, as these costs will need to be passed through to end buyers.

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Lumber Drops on Impending Tariffs

Trading Economics
January 21, 2025
Category: Finance & Economics
Region: Canada, United States

Lumber prices fell toward $580 per thousand board feet, retreating from eight-week highs of $600 on January 16th, as the impending 25% tariffs on Canadian softwood lumber, set to take effect on February 1st, weighed on the market. These tariffs, imposed by President Trump, will increase the cost of Canadian lumber, which is a key input for U.S. housing construction, potentially reducing demand as builders face higher material prices. The price hike could discourage housing projects, especially as the broader construction sector slows. Trump’s executive orders aimed at stimulating U.S. housing production, including efforts to lower construction costs, may further dampen demand for imported lumber by promoting domestic sourcing. As Canada is the largest supplier of U.S. lumber, the tariff’s impact on supply and demand dynamics is expected to be significant, with builders likely seeking alternatives as lumber prices rise.›

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Canada’s Consumer Price Index (CPI) rose 1.8% in December

Statistics Canada
January 21, 2025
Category: Finance & Economics
Region: Canada

OTTAWA —  The Consumer Price Index (CPI) rose 1.8% on a year-over-year basis in December, down from a 1.9% increase in November. …The CPI excluding food rose 2.1% in December. A temporary GST/HST break on certain goods was introduced on December 14, 2024. …The shelter component grew at a slightly slower pace in December, rising 4.5% year over year following a 4.6% increase in November. Rent prices decelerated on a year-over-year basis in December (+7.1%) compared with November (+7.7%). However since December 2021, rent prices have increased 22.1%. The mortgage interest cost index decelerated for the 16th consecutive month, reaching 11.7% year over year in December 2024, the smallest increase since October 2022 (+11.4%) as interest rates continued to rise.

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Lumber Holds Eight-Week Highs Amid Robust US Demand

Trading View
January 17, 2025
Category: Finance & Economics
Region: Canada, United States

Lumber prices remained above $590 per thousand board feet in January, hovering at eight-week highs as robust demand for building materials in the US compounded with dovish expectations for Federal Reserve policy. U.S. housing starts in December surged 15.8% from the previous month to a seasonally adjusted annual rate of 1.499 million units, the highest since February 2024 and well above market expectations of 1.32 million. Although building permits fell 0.7% to 1.483 million units, they exceeded forecasts of 1.46 million. At the same time, easing core inflation from the latest CPI report reinforced expectations of Federal Reserve rate cuts by mid-year, while mortgage applications jumped 33.3%, marking the largest weekly increase since 2020, as buyers sought to lock in borrowing costs despite rates exceeding 7%. Additionally, U.S. buyers stockpiled inventory ahead of a proposed 25% tariff on Canadian softwood lumber, while existing 14.4% duties further constrained supply. [END]

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Lumber Hits 6-Week High

Trading Economics
January 15, 2025
Category: Finance & Economics
Region: Canada, United States

Lumber prices surged to around $580 per thousand board feet in January, marking a six-week high, as uncertainty surrounding potential tariffs on Canadian softwood lumber imports to the U.S. stoked panic buying. The looming 25% tariff proposed by President-elect Trump has prompted U.S. buyers to rapidly secure inventories ahead of anticipated price hikes, further escalating demand. With Canadian lumber already subject to an average 14.4% import duty, the additional tariff is expected to push prices even higher. U.S. reliance on Canadian softwood lumber remains substantial, as Canada supplies a significant portion of the country’s lumber needs. While alternative suppliers, such as Germany and Sweden, may partially fill the gap, they lack the capacity to match Canada’s production in the long run. Meanwhile, domestic challenges, including workforce shortages and sawmill closures, are limiting U.S. production, contributing to ongoing supply constraints. [END]

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Trump tariffs ‘spooking’ lumber markets

By Nelson Bennett
Business in Vancouver
January 13, 2025
Category: Finance & Economics
Region: Canada, United States

The mere threat of tariffs being tacked onto Canadian lumber imports in the U.S. is raising fears of panic buying that could roil lumber markets and prices. “A number of Canadian lumber companies are now advising customers that they will add 25% to lumber exports to the U.S. when the tariff is announced,” global wood analyst Russ Taylor wrote. Taylor cites Nic Wilson, CEO of the Denver Group Mass Timber Summit in the US. In an email to BIV, a spokesperson for West Fraser said: “West Fraser has not issued blanket emails to customers regarding potential Trump tariffs.”  …Whether the warning letters are real or rumour, it underscores the uncertainty roiling lumber markets as a result of Trump’s tariff threats. There could be some “panic buying” as American buyers try to build February and March inventories at current prices in anticipation of a 25% spike, Wilson writes.

Related coverage in the Globe and Mail: Canadian sawmills brace for Trump’s threatened tariffs on top of existing softwood lumber duties

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Canada and America have been fighting about timber for 40 years

The Economist
January 9, 2025
Category: Finance & Economics
Region: Canada, United States

When the boss of the us Lumber Coalition took the podium at the Global Wood Summit in Vancouver, he did not have to tell his mostly Canadian audience to hold their applause. “I’m not going to make a lot of eye contact,” Zoltan van Heyningen said. …Canadian wood used to flow into the United States at quite a clip. Exports are now running at levels last seen in the 1970s, thanks to the fact that softwood lumber is the subject of the longest-running trade dispute between the two countries. …Trade war aside, Canada’s lumber industry is suffering, thanks to wobbling prices, wildfires and insect infestation that have led to mill closures and job cuts. …Canadians want a new softwood-lumber agreement. The US is in no hurry to give them one. …Kevin Mason, with ERA Forest Products Research said, “This is a battle going back to the early 1800s. It’s not going to change.” [to access the full story an Economist subscription is required]

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Potential tariffs and supply trends among key Q1 factors impacting lumber market

By Peter Malliris
RISI Fastmarkets
January 10, 2025
Category: Finance & Economics
Region: Canada, United States

A potential hike in tariffs imposed on Canadian exports to the US as early as January will highlight developments that could define first-quarter trends in the softwood lumber market. …Many traders have expressed a perception that the US economy will prosper in 2025 with a more business friendly administration in the White House. However, if the tariffs are imposed, they could significantly alter the flow of softwood lumber and panels from Canada to the US. Some Canadian producers have already noted that they will withdraw from the US market rather than deal with the rising costs. If returns on shipments to the US plunge, many Canadian mills could funnel a larger percentage of production offshore, especially to Pacific Rim destinations. …Southern Pine traders hope the first quarter sets the stage for a rebound after a difficult year in 2024. Production outpaced demand for most of the year, sustaining steady downward pressure on prices.

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Will the US Lumber Market Thrive or Break Under Trump?

By Andrew Moore
North Carolina State University News
January 6, 2025
Category: Finance & Economics
Region: Canada, United States

If president-elect Donald Trump… follows through with his tariff threat, it could have economic consequences for the U.S. lumber supply chain, according to Rajan Parajuli at NC State. …US. companies would likely attempt to recoup tariff-related losses by raising the price of Canadian softwood lumber, which would potentially impact the housing market by making building materials more expensive. …Parajuli highlighted the 2006 U.S.–Canada Softwood Lumber Agreement as an example of how tariffs can impact the supply chain. …Under the agreement, which was active until 2015, U.S. lumber producers gained $1.6 billion and U.S. consumers lost $2.3 billion as softwood lumber imports from Canada declined by 7.78% in the months when export taxes took effect. “U.S. consumers not only paid producers’ gains, but also the losses that resulted from the export taxes,” Parajuli said. In the long term, the U.S. would need to work with Canada to negotiate a new softwood lumber agreement, according to Parajuli. Germany, Sweden and other trade partners simply don’t have the inventory or capacity to displace Canada in lumber exports.

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Canada posts ninth straight monthly trade deficit in November, but with smaller shortfall

The Globe and Mail
January 7, 2025
Category: Finance & Economics
Region: Canada

Canada recorded a ninth consecutive monthly trade deficit in November, albeit smaller than expected as exports rose faster than imports, data showed on Tuesday. Total exports rose 2.2 per cent in November, helped by gains in a broad section of product categories, while imports were up 1.8 per cent, led by consumer goods and chemical, plastic and rubber products, Statistics Canada said. As a result, Canada’s trade deficit narrowed to $323-million from a revised $544-million deficit in October. Analysts polled by Reuters had expected a $900-million deficit in November. The trade surplus with the United States, by far Canada’s largest trading partner, widened to $8.2-billion from $6.6-billion in October. The surplus with the U.S. nearly offset Canada’s trade deficit with all other countries – which widened to $8.5-billion in November from $7.2-billion – underscoring the potential impact of the U.S. President-elect’s threat to impose tariffs on Canadian goods.

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‘A complete realm of uncertainty’: Alberta builders prepare for possible tariff impact

By Timm Bruch
CTV News
January 24, 2025
Category: Finance & Economics
Region: Canada, Canada West

Calgary’s construction industry is hoping the threat of American tariffs doesn’t slow its momentum in 2025. …Bill Black, the head of the Calgary Construction Association, says when it comes to certain building materials, the tariffs could cause unrepairable damage. “Lumber suppliers selling are obviously going to feel a really significant impact on their volume that goes into the U.S.,” Black said. “The overall viability of the lumber business is based on a blend of the two markets, and if one market becomes unfeasible because of tariffs, that then puts pressure on the operating businesses. “That could impact their ability to service the Canadian market as well.” …The city has seen consecutive years of a record number of housing starts, and those in the sector don’t want to lose vital momentum. …Alberta’s forest ministry reiterated the importance of cross-border trade Friday, saying there’s still optimism a tariff-stopping solution can be found.

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Tariff threats highlight gaps in West Kootenay’s forest sector preparedness

By Samantha Holomay
Castanet
January 23, 2025
Category: Finance & Economics
Region: Canada, Canada West

Tariff plans have raised questions about the West Kootenay’s forest sector preparedness. U.S. President Donald Trump has doubled down on his plans to place tariffs one of the West Kootenay’s most profitable sectors. In an interview with Castanet, Minister of Forests Ravi Parmar said the province plans to respond by instituting regulatory tariffs, speeding up permitting, and diversifying the countries B.C. exports wood to. “Minister of Finance, Brenda Bailey, relayed yesterday what the job and economic impacts of this Trump tariff would be on B.C.. At the same time, he also said that we are much better positioned than other provinces because we have done good work diversifying our economy,” said Parmar. …Some industry experts and opposition MPs argue that … the country has had ample warning time to address trade barriers embedded in the Canadian Free Trade Agreement (CFTA). Other leaders, however, have advised government officials not to impose retaliatory tariffs.

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Williams Lake First Nation Chief Speaks on Importance of Indigenous Economies at Natural Resource Forum

By Teryn Midzain
My Cariboo Now
January 17, 2025
Category: Finance & Economics
Region: Canada, Canada West

Willie Sellars

“We need a seat at the table.” Chief Willie Sellars says simply at the BC Natural Resource Forum in Prince George last night. “We are a resource-based economy in Williams Lake. What we want to do is build relationships, create revenue streams, and make sure that we are a part of the works that are happening in our traditional territory, because of the significance of the impacts that those works have to our traditional territory.” Chief Sellars says that the Williams Lake First Nation is approaching new opportunities with an “open heart and open mind”, and says politicians and industry need to keep that in mind to work together when making new policies and diversity within forestry. …With a logging company, holds in the cannabis industry, and retail space, as well as looking at new opportunities to improve health and wellness programs.

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Home insurance rates likely to spike in 2025 following severe weather events, insurers warn

By Liam Britten
CBC News
January 14, 2025
Category: Finance & Economics
Region: Canada, Canada West

With 2024 being the single-most expensive year on record in terms of insurance payouts in Canada, following a swath of devastating weather-related disasters, insurers are warning that home insurance rates in 2025 are likely to increase significantly. The Insurance Bureau of Canada says insurers paid out $8.55 billion in 2024, more than $2 billion more than 2016, the next worst year on record. It came after hundreds of homes were obliterated by a wildfire in Jasper, Alta., and parts of the Greater Toronto Area were underwater from floods in what was a year of climate-driven disasters in Canada. B.C. saw its fourth-worst wildfire season by total area burned last year, as well as a series of storms towards the end of the year that caused multiple deaths from flooding and landslides.

Related content in The Globe & Mail: How the California wildfires could affect insurance rates in Canada [requires a subscription]

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B.C. supports forest-sector manufacturing

By Ministry of Jobs, Economic Development and Innovation
Government of British Columbia
January 15, 2025
Category: Finance & Economics
Region: Canada, Canada West

New support for forest-sector manufacturers throughout the province will create and protect jobs, strengthen local economies and diversify the range of fibre sources used to manufacture high-value, made-in-B.C. forest products. “The BC Manufacturing Jobs Fund is partnering with forestry companies throughout the province to grow and stabilize their operations and get the most out of our fibre supply, while producing more made-in-B.C. engineered wood products,” said Diana Gibson, Minister of Jobs, Economic Development and Innovation. Through the BC Manufacturing Jobs Fund (BCMJF), the Government of B.C. is contributing as much as $5.1 million toward seven forest-sector capital projects and five planning projects in communities throughout the province. Cedarland Forest Products Ltd. in Maple Ridge will receive as much as $1.3 million… Gilbert Smith Forest Products in Barriere will receive as much as $1.1 million…

Additional coverage in Kelowna Capital News by Jordy Cunningham: Kelowna’s, Acutruss Industries Limited set to receive up to $100,000

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Will slowing interest rates and completed megaprojects help BC rebound?

By Michael McCullough
BC Business Magazine
January 10, 2025
Category: Finance & Economics
Region: Canada, Canada West

Predictions for 2025 include: Energy output will jump… we’ll stop talking about hybrid work… maybe… the education boom will end… the north will struggle to retain population… we’ll stop ignoring the provincial deficit. …The outlook for forest products—though an inherently renewable industry, forestry seems to be stuck in a slow, structural decline. Once credited with generating 50 cents of every dollar in B.C., the sector now accounts for between 1.5 and 3 percent of GDP, with its spinoff effects registering no more than 10%. The combination of weak markets, falling timber supply due to beetles and conservation and a new round of U.S. softwood lumber tariffs has forest companies closing mills for good now, with little to no investment in new capacity. “Once you close those mills, I don’t see them coming back,” Bryan Yu, chief economist at Central 1 Credit Union says.

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Interfor Completes Divestiture of Québec Operations

By Interfor Corporation
Global Newswire
January 10, 2025
Category: Finance & Economics
Region: Canada, Canada West

BURNABY, British Columbia — Interfor announced that it has completed the previously announced divestiture of its operations in Québec, Canada to Les Chantiers de Chibougamau Ltée. These operations include the sawmills in Val-d’Or and Matagami, as well as the Sullivan remanufacturing plant in Val-d’Or. [Interfor announced its plan to exit its Quebec, Canada operations on October 15, 2024. Interfor will continue to own and operate its five sawmills and one I-Joist EWP facility in Ontario and its two sawmills and woodlands management business in New Brunswick.]

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Lumber Market 2025: The good, the bad and the ugly news

By Russ Taylor, Russ Taylor Global
Truck LoggerBC Magazine
January 3, 2025
Category: Finance & Economics
Region: Canada, Canada West

After a dismal 2023 and 2024 in lumber markets in both demand and prices, it can only get better in 2025, right? Well, that depends. …The outlook for 2025 needs to incorporate several variables:

  • The good news: Global, Canadian and US interest rates are finally retreating. …North American demand in repair and remodelling and in new residential construction is coming off 2 years of declines against a background of severe housing shortages. …The good news is that over 5 per cent of excess North American sawmill output was permanently removed in 2024, clearing the way for potential supply shortages…
  • The bad news: In 2025, US lumber duties and tariffs could be market killers… There are also implications if China is hit with 60 per cent US import tariffs.
  • The ugly: In BC, government forest policy along with a lack of solutions to accelerating the issuance of key operating requirements …continues to work against forest operators.

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Manulife Investment Management closes $480m Forest Climate Fund

By Sergio Barreto
Alternatives Watch
January 28, 2025
Category: Finance & Economics
Region: United States

Manulife Investment Management held the final close of its Forest Climate Fund, securing $480.1 million in commitments from U.S. and global investors seeking to combat climate change through sustainable forest management. The fund, which prioritizes carbon sequestration over timber production, aims to capture more than 6 million tons of carbon dioxide throughout its term while providing investors with high-quality carbon credits and the option for offset sales or in-kind distributions… Manulife IM, which oversees more than five million acres of timberland, operates within the firm’s $100 billion private markets platform, which includes various alternative investments as of Oct. 31, 2024. Eric Cooperstrom, managing director of impact investing and natural climate solutions at Manulife IM, noted, “Investors are showing confidence in forests as a top natural climate solution.”

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Limited Existing Inventory Provides a Boost for New Home Sales in December

By Robert Dietz
NAHB Eye on Housing
January 27, 2025
Category: Finance & Economics
Region: United States

A limited amount of existing inventory along with solid demand helped new home sales end the year on an up note, even as buyers continue to grapple with housing affordability challenges. Sales of newly built, single-family homes in December increased 3.6% to a 698,000 seasonally adjusted annual rate. The pace of new home sales in December was up 6.7% compared to a year earlier. New home sales ended 2024 2.5% higher over the 2023 total. NAHB is forecasting a slight gain for sales in 2025 given ongoing solid macroeconomic conditions, particularly for the labor market. Furthermore, builders are cautiously optimistic about the building market given a post-election policy reset that seeks to eliminate unnecessary regulations.

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How Trump’s Tariffs Could Impact the Housing Market

By Kerra Bolton
Open Bank Account
January 22, 2025
Category: Finance & Economics
Region: United States

President Donald Trump’s proposal to implement significant tariffs on the country’s key trading partners could have ripple effects on the U.S. housing market. …The tariffs could drive up prices for new homes and renovations, further straining an already tight market. “The tariffs will raise the cost of materials, which could directly increase the cost of constructing new homes,” said Wayne Winegarden at Pacific Research Institute. Experts said tariffs are a tax that increases the costs of imported goods, including building materials. …Higher material and construction costs caused by the tariffs could make buying a home out of reach for many people. “The tariffs will slow down the economy and will also encourage the Federal Reserve to pursue a higher interest rate environment,” Winegarden said. …Together, the higher rates coupled with the rising cost of construction will significantly reduce housing affordability.”

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Cost of Constructing a Home reaches record high in 2024

By Eric Lynch
The NAHB Eye on Housing
January 23, 2025
Category: Finance & Economics
Region: United States

Construction costs account for 64.4% of the average price of a home, according to NAHB’s most recent Cost of Construction Survey. In 2022, the share was 3.6 points lower, at 60.8%. The latest finding marks a record high for construction costs since the inception of the series in 1998. The finished lot was the second largest cost at 13.7% of the sales price, down more than four percentage points from 17.8% in 2022. …The average builder profit margin was 11.0% in 2024, up less than a percentage point from 10.1% in 2022. …Construction costs were broken down into eight major stages of construction. Interior finishes, at 24.1%, accounted for the largest share of construction costs, followed by major system rough-ins (19.2%), framing (16.6%), exterior finishes (13.4%), foundations (10.5%), site work (7.6%), final steps (6.5%), and other costs (2.1%). Explore the interactive dashboard below to view the costs and percentage of construction costs for the eight stages and their 36 components.

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US Annual Home Price Growth Has Returned To Pre-Pandemic Speeds

By Mark Worley
Redfin.com
January 21, 2025
Category: Finance & Economics
Region: United States

U.S. home prices rose 0.4% from a month earlier in December on a seasonally adjusted basis, slightly slower than the 0.5% growth posted in November. This is according to the Redfin Home Price Index (RHPI). …On a year-over-year basis, home prices closed the 2024 calendar year up 5.4%. That was the second-smallest annual increase in a calendar year since Redfin started tracking the RHPI in 2013, only trailing 2015 (5.2%). Redfin predicts home prices will continue to rise steadily throughout 2025, growing at a similar rate to 2024. “Prices will keep going up consistently because it’s unlikely there will be enough new inventory to meet buyer demand,” said Redfin Senior Economist Sheharyar Bokhari. 

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Moving Out of Parental Homes is On Hold

By Natalia Siniavskaia
NAHB – Eye on Housing
January 20, 2025
Category: Finance & Economics
Region: United States

The worst on record rental affordability conditions, depleted “excess” savings of the pandemic era, and high mortgage rates halted the post-pandemic trend of young adults moving out of parental homes. The share of adults ages 25-34 living with parents or parents-in-law hovered just above 19% in 2023, stagnant from 2022, according to NAHB’s analysis. …While this percentage is the second lowest since 2011, the share remains elevated by historical standards. …Traditionally, young adults ages 25 to 34 make up around half of all first-time homebuyers. …The current share of 19.2% translates into 8.5 million young adults living in homes of their parents or parents-in-law. In contrast, less than 12% of young adults ages 25 to 34, or 4.6 million, lived with parents in 2000.

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US Builder Confidence Edges Up Even as Market Risk Concerns Rise

By Robert Dietz
NAHB Eye on Housing
January 16, 2025
Category: Finance & Economics
Region: United States

Builder sentiment edged higher to begin the year on hopes for an improved economic growth and regulatory environment. At the same time, builders expressed concerns over building material tariffs and costs and a larger government deficit that would put upward pressure on inflation and mortgage rates. Builder confidence in the market for newly built single-family homes was 47 in January, up one point from December. …The latest HMI survey also revealed that 30% of builders cut home prices in January. This share has been stable between 30% and 33% since last July. Meanwhile, the average price reduction was 5% in January, the same rate as in December. …The HMI index gauging current sales conditions rose three points to 51 and the gauge charting traffic of prospective buyers posted a two-point gain to 33. The component measuring sales expectations in the next six months fell six points to 60 because of the elevated interest rate environment.

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US Remodelling Market Sentiment Improves in Fourth Quarter of 2024

By Eric Lynch
NAHB – Eye on Housing
January 16, 2025
Category: Finance & Economics
Region: United States

The NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 68 for the fourth quarter of 2024, up five points compared to the previous quarter. Remodelers are more optimistic about the market than they were earlier in the year, corroborated by NAHB’s recent analysis of home improvement loan applications. Demand in many parts of the country was stronger than usual for the fall season, especially demand for larger projects, with leads coming in after the uncertainty about the November elections was removed. …The Current Conditions Index averaged 75, increasing three points from the previous quarter. All three components remained well above 50 in positive territory: large remodeling projects rose eight points to 75, moderate remodeling projects increased two points to 73, and small remodeling projects inched down one point to 76. …The Future Indicators Index was 61, up six points from the previous quarter. 

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US Housing Starts Skyrocket To Ten-Month High In December

RTT News
January 17, 2025
Category: Finance & Economics
Region: United States

A report released by the Commerce Department on Friday showed new residential construction in the U.S. surged by much more than anticipated in the month of December. The Commerce Department said housing starts soared by 15.8 percent to an annual rate of 1.499 million in December after tumbling by 3.7 percent to a revised rate of 1.294 million in November. …The spike by housing starts came amid a substantial rebound by multi-family starts, which skyrocketed by 61.5 percent to an annual rate of 449,000 in December after plummeting by 30.7 percent to an annual rate of 278,000 in November. Single-family starts also shot up by 3.3 percent to an annual rate of 1.050 million in December after surging by 7.7 percent to an annual rate of 1.016 million in November. Meanwhile, the report said building permits slid by 0.7 percent to an annual rate of 1.483 million in December after surging by 5.2 percent to a revised rate of 1.493 million in November.

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US Housing Inflation Moderates Amid Higher Energy Costs

By Fan-Yu Kuo
The NAHB Eye on Housing
January 15, 2025
Category: Finance & Economics
Region: United States

Inflation edged up to a five-month high in December as energy prices surged, accounting for more than 40% of the monthly headline increase. Inflation ended 2024 at a 2.9% rate, down from 3.4% a year ago, although the last mile to the Fed’s 2% target continues to be challenging. While core inflation remained stubborn due to elevated shelter and other service costs, housing costs showed signs of cooling – the year-over-year change in the shelter index remained below 5% for a fourth straight month. …The election result has put inflation back in the spotlight and added additional risks to the economic outlook. Proposed tax cuts and tariffs could increase inflationary pressures, suggesting a more gradual easing cycle with a slightly higher terminal federal funds rate. …Given the housing market’s sensitivity to interest rates, a higher inflation path could extend the affordability crisis and constrain housing supply as builders continue to grapple with lingering supply chain challenges.

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US job growth blows away expectations in December; unemployment rate falls to 4.1%

By Lucia Mutikani
Reuters
January 10, 2025
Category: Finance & Economics
Region: United States

WASHINGTON – U.S. job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1% as the labor market ended the year on a solid footing, reinforcing views that the Federal Reserve would keep interest rates unchanged this month. The Labor Department’s employment report on Friday also showed a decline last month in the number of people who have permanently lost their jobs and a shortening in the median duration of unemployment. A rise in these measures had raised concerns about labor market deterioration. The upbeat report also supported the U.S. central bank’s cautious stance toward further monetary policy easing this year amid mounting fears that pledges by President-elect Donald Trump to impose or massively raise tariffs on imports and deport millions of undocumented immigrants could stoke inflation. …The economy is expanding at well above the 1.8% pace that Fed officials regard as the non-inflationary growth rate.

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Freddie Mac Multifamily’s 2025 Outlook Forecasts Increased Originations, Modest Growth in Year Ahead

Freddie Mac in the Globe and Mail
January 8, 2025
Category: Finance & Economics
Region: United States

Freddie Mac’s newly released Outlook forecasts multifamily originations to rise in 2025, while predicting modest rent growth below the long-term average and a slight increase in vacancy rates, which will remain above the long-term average. Analysis notes that through the end of 2024, despite strong demand, record-high supply kept market fundamentals muted. …Freddie Mac’s research indicates that despite short-term pressures, multifamily will likely remain a favored asset class over the long term. …The Outlook forecasts disparate performance across the nation, with many of the larger Sun Belt and Mountain West markets seeing very high levels of supply causing performance to lag. Conversely, markets with lower supply levels, especially smaller, secondary and tertiary markets in the Sun Belt along with larger coastal and gateway markets, are expected to see stronger performance in 2025.

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Dollar drops over report Donald Trump considering scaling back tariff plans

By George Steer and Ian Smith
The Financial Times
January 6, 2025
Category: Finance & Economics
Region: United States, International

The US dollar fell on Monday after reports that president-elect Donald Trump’s administration is considering watering down a campaign pledge to apply sweeping tariffs on imported goods. The dollar index, which tracks the currency against a basket of six peers, initially fell more than 1% after The Washington Post reported that potential tariffs might be confined to critical imports. …However, the greenback pared its losses to 0.7% later in the day, after Trump denied the report, describing it as “fake news”. …The report that tariffs would be scaled back had sparked a “relief rally” in the euro, with hopes that the region’s carmakers could be spared levies. The tariffs might also “be less inflationary than first expected”, he added. …Analysts and economists expect Trump’s pro-growth, potentially inflationary policies to limit the number of times that the US Federal Reserve will cut interest rates this year, boosting demand for the dollar relative to other major currencies. 

Related coverage in Reuters: Canadian dollar jumps on Trudeau and tariff reports

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PotlatchDeltic reports Q4, 2024 net income of $5.2 million

PotlatchDeltic Corporation
January 27, 2025
Category: Finance & Economics
Region: United States, US West

SPOKANE, Washington — PotlatchDeltic Corporation reported net income of $5.2 millionon revenues of $258.1 million for the quarter ended December 31, 2024. This compares to a net loss was $0.1 million on revenues of $254.5 million for the quarter ended December 31, 2023. Net income for the full year 2024 was $21.9 million on revenues of $1.1 billion. …Eric Cremers, President and CEO said, “Our results reflect the strong performance of our Real Estate business and the stability provided by our Timberland operations. Additionally, we successfully achieved several strategic initiatives for the year, highlighted by the completion of the expansion and modernization project at our Waldo, Arkansas sawmill.

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Those rebuilding after L.A. fires will likely face higher lumber prices as Trump tariffs loom

By Don Lee
MSN
January 16, 2025
Category: Finance & Economics
Region: United States, US West

Devastating, often tragic as the Los Angeles wildfires have been, rebuilding could bring nightmares all its own, including murky insurance rules, material shortages and potentially higher cost for everything from lumber to bathtubs. In terms of economic upheaval, it could be the construction industry equivalent of what the COVID-19 pandemic did to the economy just a few years ago. Lumber is the single biggest component of homebuilding materials, accounting for about 15% of overall home construction costs. Southern California builders use wood for framing homes that’s sourced mostly from Canada and the Pacific Northwest. And the last couple of years have left the lumber industry ill-prepared for a big surge in demand.

Readers with an account can find the original story in the Los Angeles Times here

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How climate change is reshaping home insurance in California — and the rest of the U.S.

By Natalie Escobar
KNKX Public Radio
January 14, 2025
Category: Finance & Economics
Region: United States, US West

Insurance rates in California have been slowly ticking up for years, though climate change isn’t the only driving factor, according to Meredith Fowlie, who researches the links between wildfire risk and insurance prices. In her research it’s clear that the worsening wildfire seasons have been a major driving force behind California’s market instability… In totality, “California has been suffering from an insurance crisis like we’ve never seen,” California Insurance Commissioner Ricardo Lara says… If the past few years have demonstrated anything, it’s that traditional insurance models have had trouble accounting for the “known unknown” risks that climate change poses, the Environmental Defense Fund’s Kousky says, making it difficult to provide coverage affordably. What has become clear, though, is that it’s a problem that U.S. homeowners are not going to be able to ignore. “It’s the one place where I feel lots of Americans are seeing the costs of climate hit their pocketbooks,” she says.

Related coverage from The Globe and Mail: Damage from natural disasters in Canada hit record $8.5-billion in 2024, as industry group warns some regions may become uninsurable [requires a subscription]

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Global Consulting Alliance: Forest Sector Outlook Report – 2024-Q4

By Russ Taylor
Russ Taylor Global
January 26, 2025
Category: Finance & Economics
Region: International

RUSS TAYLOR GLOBAL is pleased to provide the latest quarterly report from the Global Consulting AllianceRUSS TAYLOR GLOBAL is a member of this group that features six independent consulting companies from around the world that focus on the international forestry and wood products sectors. The Forest Sector Outlook – 2024-Q1 report features global economic and forests/industry/market updates from all continents around the world. The report includes regional reviews on local market and industry developments in wood products and timberlands for each region. This 14-page report is available on our website.

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UK timber industry predictions: 2025 looking ahead

By David Hopkins, Chief Executive
The Timber Trades Journal
January 24, 2025
Category: Finance & Economics
Region: International

UNITED KINGDOM — Most of us will have been pleased to see the back of 2024 as the sense of stagnation and sluggishness was felt from Downing Street to the High Street. …Despite the negative messaging, some of the government actions have been quite positive, albeit with a longer-term vision than a short-term sugar rush. The attempts to increase investment in infrastructure, especially housing, transport, energy and broadband will be key to improving productivity growth. …The introduction of the Future Homes Standard this year will also strengthen the case for timber construction systems due to its superior thermal and carbon performance. Finally, the government’s attempts to upskill and enlarge the labour force could also bear fruit for our sector. …We must show that the timber industry is essential to deliver on the government’s house building mission. 

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New Forests raises €410m for sustainable forestry fund backed by European investors

By Ian Lewis
ImpactInvestor
January 15, 2025
Category: Finance & Economics
Region: International

Investment manager New Forests said it had raised some A$450m (€410m) from Australian and European institutional investors at the first close of its Australia New Zealand Landscapes and Forestry Fund. The fund is targeting an overall size of A$600m, which New Forests hopes to reach within the next year. David Shelton, New Forests’ managing director, Australia and New Zealand and global head of investments, said investment in the forestry and land use sectors was a crucial in creating a pathway towards net zero. Shelton said the fund still had a core focus on forestry, because most of its investor clients still wanted to invest in a forestry fund, but the fund’s structure gave it flexibility to transition some land between forestry and sustainable agriculture, or to acquire agricultural land in response to a particular price trend.

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