Lumber market: A cooler housing market and high borrowing costs have had an impact

By Feral McAlinden
Canadian Mortgage Professional Magazine
July 7, 2023
Category: Finance & Economics
Region: Canada, United States

Russ Taylor

Rising interest rates and building costs have helped contribute to a sluggish pace of home construction in Canada so far in 2023 – and that’s spilled over into a subdued first half of the year for lumber markets, according to industry consultant Russ Taylor. …Low prices and weak demand have seen a reduction in mill operating rates, with BC – typically a high-cost producer – bearing the brunt of the downturn. That’s despite a recent rally partly caused by wildfires. …BC’s year-to-date production is down substantially this year, around 10% lower than prior year in the interior, Taylor said. Coastal production is set to fall by around 5%. The US, by contrast, is faring decidedly better. …One segment that’s accounting for a sizeable share of demand is the DIY space, described by Taylor as a “robust” business at present because many consumers are taking advantage of low prices to carry out smaller projects. 

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