"U.S. Demand for Lumber Production Expected to Hit All-Time High in 1999, Then Decline Slightly"

“While western lumber production may have declined slightly in 1998, America’s appetite for lumber products continues to grow. Lumber demand in 1999 is expected to reach an all-time high for the second consecutive year, according to the Western Wood Products Association.Lumber demand is forecast to decline modestly in 2000, but to remain at historic high volumes.WWPA’s semiannual forecast of lumber supply and demand estimates U.S. lumber demand will total a record 53.3 billion board feet in 1999, an increase of 2.2 percent from 1998.Unexpected gains in housing construction and the continued growth of the economy are expected to contribute to the record lumber demand. WWPA expects housing starts to finish the year at 1.65 million, the best year for housing since 1986.Lumber use for repair and remodeling is also forecast to rise 1.5 percent. Together, residential construction and repair and remodeling account for two-thirds of the lumber use in the country.For the year 2000, WWPA is forecasting lumber demand to slip by 2 percent to 52.3 billion board feet. While lower, the demand volume in 2000 would be the second highest in history, according to the association.Housing starts are expected to fall 5.3 percent to 1.56 million, as WWPA anticipates slightly higher interest rates and slower economic growth in 2000.Western lumber production should improve to nearly 17 billion board feet in 1999, according to WWPA figures, up 3 percent from 1998. Output at western sawmills is expected to fall a modest 1.8 percent to 16.66 billion board feet next year.Lumber imports are expected to top a record 18.96 billion board feet in 1999, with most of the volume coming from Canada. In 2000, WWPA estimates a 1.1 percent decline in lumber imports.U.S. lumber exports should recover in 1999 to 1.35 billion board feet, according to WWPA, following a sharp drop in 19989 caused by economic problems in Asia and Japan. In line with an expected economic recovery worldwide, exports in 2000 are forecast to rise 4.3 percent.”