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Pragmatic Capitalism

Practical Views on Money, Finance & Life

LUMBER PRODUCTION SET TO INCREASE IN 2010

The recent surge in lumber prices might be one of the brighest signs for the economic recovery.  On the back of the housing meltdown and the ensuing credit crisis investors are largely relying on a rebound in housing to confirm the consumer balance sheet recovery.  As we’ve noted previously, lumber has had a very high correlation with housing activity and the recent move higher in lumber prices, though somewhat inexplicable at the time,  is now being confirmed by data out of the Engineered Wood Association. Though not robust, this is anything but a good sign:

APA — The Engineered Wood Association is forecasting plywood production to increase 4% in 2010. OSB production is forecast to increase 14%, glulam timbers 8%, wood I-joists 35%, and LVL 25%. U.S. and Canadian structural wood panel exports are expected to finish 2009 down 45% from 2008. Demand for structural panels from the residential construction, remodeling, and industrial markets are expected to see 2010 increases of 24%, 7%, and 5%, respectively. APA forecasts U.S. housing starts to reach 665,000 units in 2010. – 12/4/2009

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Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC.Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services.He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.
Cullen Roche

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