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INDUSTRY AT A
GLANCE
From Forest2Market's Economic Outlook
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The Bureau of Economic
Analysis (BEA) reported in January that the U.S. economy expanded by 5.7 percent in 4Q2009 - the
fastest rate of growth in six years. On February 26, the BEA revised that number upward. Fourth
quarter GDP now stands at 5.9 percent. Most of the growth occurred in private domestic investment
(PDI), particularly inventory rebuilding.
Both the Wood and Paper Products industries indicated a pick-up in overall activity during
January, although details were rather sketchy (see Table 1). Particularly important were rising new
orders and falling customers' inventories.
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HOUSING MARKET
UPDATE
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The real estate market
showed new signs of weakness in January, a result of the temporary interruption of the homebuyer
tax credit, weather in many parts of the country that was not conducive to house hunting and a
continuous stream of foreclosures.
Sales of existing homes fell to 5.05 million units in January, down 7.2 percent from
December (see Table 1), though still 11.5 percent above January 2009 levels. Months of inventory
rose in January, up from 7.2 months to 7.8 months. This is 8.3 percent higher than December, but
still an improvement of 18.8 percent from January 2009.
Sales of new homes declined in January as well, down 11.2 percent from 348,000 in December
to 309,000.
This is a record low. Inventory lost ground as well. January's inventory jumped 13.8
percent to 9.1 months. While disappointing, this figure is still 26.6 percent better than
January 2009's number.
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PACIFIC NORTHWEST
UPDATE
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By: Gordon Culbertson
Inland Eastside log
prices have remained subdued while prices west of the Cascades have risen sharply. Douglas fir
prices in the inland empire are up only 7% since spring 2009; similar logs in the coastal region
increased nearly 30% over the same period. Domestic Douglas fir log prices converted on a common
long-log-scale basis are now $30-50 per MBF higher west of the Cascades.
Lumber and plywood price increases in January and February led Westside mill buyers to
escalate prices. Taking advantage of these higher product price levels, mills with low log
inventories have been securing logs for "real time" production. Competition for logs purchased by
exporters have cut deeply into domestic supplies as China and Korea sorts now include many common
quality logs historically destined for domestic building products.
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PORTS LOOK TO WOOD
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For Economic Development and the Future
In the Northwest, at the
Port of Port Angeles in Washington, a 554-foot bulk cargo ship is ready for loading. The ship will
carry logs--the equivalent of 2 million board feet of lumber--to Korea and China. At the Port of
Astoria in Oregon, the port commission has started lease negotiations with Westerlund Log Handlers
for 12-15 acres of land for 10 years. Westerlund intends to export logs to China.
An increasing number of Pacific coast port authorities are investigating potential
opportunities for increasing exports. Some, like Port Angeles and Astoria, are reclaiming the past
and hoping to export logs just as they did decades ago. Others are looking to export wood pellets
to new energy markets. Since domestic demand for wood products is likely to remain anemic for
the next five years, there is hope in these communities that exporting wood to Asia will create
jobs and support local economies.
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NEW SFI STANDARDS
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By: Lina Jenkins
After an exhaustive
18-month review process,
Sustainable Forestry Initiative (SFI),
Inc. has released its
2010-2014 Standard.
In an effort to clarify and augment the scope of the 2005-2009 Standard, the SFI expanded upon the
previous standard by increasing its principles from nine to fourteen and adding seven objectives,
four performance measures and twelve indicators. Currently, SFI certifies 181 million acres of
North American forests, making it the single largest forest certification standard in the world.
To further the use of best management practices on forested lands, the new standard added or
revised several key tenets that encourage or require better adherence to these practices. The new
standards clarify exceptions to average clearcut sizes in order to meet legal requirements.
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