According to a recent article in the Wall Street Journal, the timber industry is experiencing a desperately-needed rebound. Eugene, Oregon seems to be undergoing the greatest renaissance, with mills once again hiring full-time employees. Increased hiring is indicative of growing local and national demand for wood products and resources, and should create a ripple effect for related industries.
Still undetermined is the trickle down to consumers from rising lumber costs. Random Lengths, an industry newsletter based in Eugene, notes that prices for framing lumber (measured in $/1,000 board feet) have doubled from four years ago, risen 46 percent over the past year, and are hovering at highs not seen since 2005. It’s only a matter of time before those dramatic increases are passed down to buyers. The question will be whether the recent improvements in the residential and commercial construction markets, and other lumber-intensive industries, will continue to trend upward. Will new construction become too costly for potential buyers? Or, will buyers and sellers solve the issue of rising costs?
One frequently overlooked solution to this issue could be the international market. The Journal article notes that increased timber exports to China have helped the current surge. A nation of billions purchasing anything from the U.S. is a good sign for our economy, and portends an interesting opportunity abroad. At the very least, the exportation of timber to the Asian continent is a positive for the domestic lumber industry and merits close attention during the current economic cycle.