Business, Contracting, Markets 36 The Mainline 2025 Forest Products Industry Predictions N. America’s forest products industry faced a 2024 of change, marked by shifting markets and unexpected challenges. Despite the possibility of ongoing volatility, consultants are optimistic about the U.S. forest products industry in 2025—as they predict: • Lumber market to rebound in late-2025 with new U.S. mill announcements on horizon. Resourcewise.com projected lumber market would rebound in second-half of 2025, driven by anticipated interest rate declines and construction resurgence (1/6/25). • Forisk.com outlook for 2025 U.S. housing starts predicted 1.393 million units, rising 2.1% above 2024 (1/28/25). • ConstructConnect.com forecasted 2025 U.S. housing starts of 1.480 million units, an increase of 8.5% (11/20/24). • A wide spread among different 2025 housing forecasts reflects the high uncertainty about many factors: Fed rates, mortgage rates, labor availability, inflation, government policies, and disagreement over U.S. economic direction. Housing analysts are concerned that tight North American lumber supplies could cause volatility, due to many 2024 mill curtailments, especially in Western Canada. Fastmarkets/RISI estimates that 2024 sawmill curtailments reduced North American lumber production by 3.1 billion bdft. Housing Ends 2024 At Solid Rate U.S. housing starts improved to a seasonally-adjusted annual rate of 1.499 million units in December, 16% above November’s rate, but 4% below the December 2023 figure, according to the U.S. Census Bureau and HUD Dept. December’s U.S. building permits were just 1% below the November report, at a seasonally-adjusted annual rate of 1.483 million units/year, and was 3% under the prior year’s December 2023 permit rate. January's U.S. home builder optimism for single-family home demand rose 1 point from the prior month to its nine-month high, at a score of 47, according to the National Assoc. of Home Builders (NAHB)/ Wells Fargo Housing Index (HMI). An HMI score over 50 indicates that more builders view conditions as “good.” Remodeling Rebounds to Fresh High The fourth quarter 2024 Remodeling Market Index (RMI) closed the year on its high-mark, rising five points from the prior quarter, to a score of 68, as reported by National Assoc. of Home Builders/Westlake Royal (NAHB). The year-end 2024 score was its highest since 2023 spring quarter. 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. NAHB’s ‘Eye on Housing E-news’ reported January 16 that, “Remodelers are more optimistic about the market than they were earlier… Demand in many parts of the country was stronger than usual for the fall season…” Trade Policy Reviews After his January 20th inauguration, President Trump signed a flurry of needed executive orders (EO) in the early weeks, including his ‘America First Trade Policy.’ While the news media bantered about worst-case tariff impacts, the President’s Trade Policy actually directs a practical whole-of-government approach to studying, “our country’s large annual trade deficits in goods, as well as economic and national security implications resulting from deficits, and recommend appropriate measures, such as tariffs or other policies to remedy the deficits.” Addressing both duties for antidumping and countervailing, the EO also asks for policy reviews, with regard to foreign trade subsidies, cost adjustments, affiliations, and zeroing. The important U.S. softwood lumber duties currently levied on Canadian lumber imports into the U.S. should be continued, regardless of this review. The EO instructs key departments to identify unfair foreign trade practices— and then determine actions solving these deficits in a report by April 1, 2025. This report could shape possible trade reforms that support U.S. manufacturing, including Oregon’s forest products and forestry. Wood Pellet Production Expanding Five West Coast wood pellet plants are planned or under construction. All will manufacture wood pellets from sawmill and veneer mill residuals—primarily for pellet export to Asia for power generation. Pellets are a rising global market for a non-fossil fuel used in commercial or home heat, as well as power stations that have retrofitted from coal. • Drax/Pinnacle Renewable Holdings building a plant producing 1 million pounds of pellets/year at Port of Longview 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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