Business, Contracting, Markets 34 The Mainline Housing Challenged U.S. housing starts were at a seasonally- adjusted annual rate of 1.353 million units in June, 3% above May’s rate, but 4% under the June 2023 figure, according to the U.S. Census Bureau and HUD Dept. June’s U.S. building permits were 3% below the May report, at a seasonally- adjusted annual rate of 1.446 million units/year, and 3% below the prior year’s June 2023 permit rate. The July U.S. home builder optimism for single-family home demand fell one point from the prior month, to a score of 42, according to the National Assoc. of Home Builders (NAHB)/Wells Fargo Housing Index (HMI). The HMI survey asks builders to rate market conditions for new home sales in the next six months. An HMI score over 50 indicates that more builders view conditions as “good.” “Higher rates for builder and developer loans, along with ongoing supply-side challenges regarding construction labor and buildable lots, are headwinds for new home and apartment construction,” said Carl Harris, chairman of NAHB. Remodeling Reliable The second quarter 2024 Remodeling Market Index (RMI) slipped down one point from the prior quarter, to a score of 65, as reported by National Assoc. of Home Builders/Westlake Royal (NAHB). A leading use of U.S.-produced structural softwood, home remodeling is a key measure of Oregon wood demand. On a scale of 0 to 100, an RMI score over 50 indicates that more remodelers report “good” market conditions than poor. “Although some remodelers are reporting a slowdown, most continue to see solid demand for remodeling projects,” said NAHB Remodelers Chair Mike Pressgrove. Two July Sawmill Closures in Oregon Western Cascade Industries permanently closed its Toledo sawmill (near Newport) on July 31, putting 50 people out of work. The stud mill closure appears to be the result of soft lumber market pricing and not enough log supply in the working circle. Prineville-based Ochoco Lumber Co. announced in July that it would permanently close its Malheur Lumber sawmill in John Day, after current log inventory was milled and shipped. Malheur Lumber officials said, “The current cost of operating a small manufacturing business in the rural part of the state seems no longer sustainable.” The last remaining sawmill in the eight-county Central Oregon region, Malheur Lumber operated for 41 years and employed 76 workers. A number of factors were cited to explain the shuttering: • Government regulation on small business • Unfavorable lumber/fiber market conditions • Inflationary manufacturing and trucking costs • Low production due to workforce issues • Lack of a willing, drug-free workforce • Lacking housing to recruit workers A Malheur National Forest ten-year stewardship contract with the John Day logging company Iron Triangle had guaranteed a local timber supply to the John Day area. That contract, which expired in March 2023, in its early years produced 50–60 million bdft annually; but its reliability had tailed-off in recent years. Restoration Fuels, which built a small torrefaction and biochar plant at the mill in 2020, closed on July 15, laying off 11 employees. That plant had become uneconomical. Seven Oregon Sawmill Closures in 2024 Forest contractors and rural communities are shocked by mounting mill closures this year, including: 1. Malheur Lumber’s John Day sawmill closed in August 2. Western Cascade Industries Toledo sawmill closed in July 3. C&D Lumber’s Riddle sawmill closed in May 4. Prairie Wood Prod. Prairie City sawmill completed closure in March 5. Interfor Corp. Philomath sawmill closed in February 6. Rosboro Co. Springfield stud mill closed for a rebuild in February 7. Hampton Lumber Banks sawmill closed in January Mill Closures Are Obstacles That Will Be Overcome The loss of rural timber mills is an emerging problem for a number of reasons, including: loss of work for forest contractors; reduced private forest timber markets; depleted outlet to thin overcrowded federal forests; unmitigated wildfire risks on public lands; curbed forest road maintenance needed for Oregon Market Spotlight Monthly Report About Wood Product Markets, Which Affect Demand for Oregon Timber Harvest ›By Rex Storm, Executive Vice President
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