U.S. Economy and Housing Market
The U.S. economy is still improving in fits and starts. In October 2009, the unemployment rate peaked at 10 percent, dropping back to 6.7 percent as of December, while the unemployment rate for recent undergraduates continues to push 13 percent.
Year-over-year gross domestic product (GDP) growth remains modest at below two percent, averaged over the last four quarters ending in December (the government shutdown last year will suppress GDP in this and future quarters).
The housing market continues to show positive signs: new housing starts in the 2013 averaged 928,000 (up 18 percent over 2012 and 52 percent over 2011) and average U.S. housing prices have increased in each of the last 22 months through November.
The U.S. economy still faces significant challenges. There are still too many unemployed workers, though some have re-entered the workforce after having left; the financial and economic crises in Europe are improving, but several European countries remain in recession; China’s economy has slowed; and the U.S. government still has not implemented a coherent, growth-driven economic policy.
Lumber and Log Prices
Lumber and log prices were up in 2013. While it varied widely, Random Lengths’ Coast Dry Random and Stud composite lumber price averaged $370/ thousand board feet (mbf)—up 20 percent from the 2012 average of $309/mbf. Pacific Northwest log prices have also moved up sharply after being fairly flat for 2011 and most of 2012. The price for a ‘typical’ DNR log delivered to the mill climbed dramatically to a nominal high of $587/mbf in April, the highest price since 2000. The log price then fell a bit before climbing back to $610/mbf in December, to average $564/mbf for the year—up 18 percent from 2012’s average of $480/mbf.
Timber Sales Prices
FY 14 average sales price is now predicted to be about $345/mbf, up two percent from the $337/mbf predicted in November. Weighted by volume, sales prices have averaged $342/mbf in the first seven months of the fiscal year. The predicted sales price for FY 15 is essentially unchanged, at $382/mbf. Based on changes to anticipated thinning sale volumes and a reassessment of the cyclical nature of lumber, log, and stumpage inventories, future sales prices estimates are lowered to about $493/mbf in FY 16, and $401/mbf in FY 17.
Originally posted at Forest Stewardship Notes. Article statistics source: “February 2014 DNREconomic and Revenue Forecast Highlights,” Washington State Department of Natural Resources