This story was originally published in ProSales.
While there are larger perceptions that 2019 may bring a recession, the lumber industry does not seem to agree with this idea, and neither does Charlotte, N.C.-based consultant Matt Layman. In Layman’s latest Lumber Market Forecast, he projects that despite his expectations for a slow January, the lumber industry will experience a strong start to the Spring of 2019.
The lumber industry expects Spring 2019 to start off very well, however Layman cautions against the desire for some in the industry to buy four to six months of inventory on the basis of industry optimism. According to Layman, the lumber market will trade indecisively in the penultimate week of 2018, leading to impatient buyers and curtailed production. This will create higher lumber prices during January 2019 and lower builder lumber demand. However, this weak projected month will not be enough to prevent a stronger start to the spring months next year.
Layman’s analysis predicts halting rate increases for the market, affordable housing solutions, inexpensive lumber, trade cease fires, and massive nationwide pent-up demand in every region of the U.S. Subsequently, Layman believes that lumber demand will be very strong in Q2 & Q3 compared to a noisy and volatile first quarter.
In addition to an overarching look at the lumber market for the short- and long-term, Layman also offers short- and long-term views on different types of lumbers through 2019 in his Market Forecast.
Canadian SPF
In the short-term, Canadian SPF could not muster enough new orders to get even a one-week order file, according to Layman. He believes the Canadian SPF market will remain vulnerable to noise and despite the declining market in the U.S. lumber market, the audience for the product is larger than ever.
Western U.S. Dry Fir Lumber
While local sales remain strong, western U.S. lumber producers have had prices pressured by the Canadian Dry Doug Fir, which has impacted peripheral markets.
Green Douglas Fir Lumber
According to Layman, price has not been an excuse for the GDF market for some time. And while builders may like for the current prices to get locked in for the year, underlying strength in the market “may get buried while those constructing a recession have their way for a couple more months.”
This story was originally published in ProSales.
