The Wood and Fiber Supply Chain Experts
Industry At a Glance: From Forest2Market's Economic Outlook
From the April 2010 Forest2Mill newsletter.
Performance was mixed in February for wood and paper products
manufacturing (Table 1). With increases in overall activity, new and backlogged orders, and
declining customer inventories, Paper Products looks to be reasonably well positioned for the
future. Wood Products, on the other hand, continues to wither; the only ray of sunshine came from a
decline in customer inventories, but that was tempered by shrinking order books.
According to the Association of American Railroads’ (AAR) Rail Time Indicators report, the
volume of U.S. rail traffic is still “off” from 2009’s levels – and even more substantially
relative to 2008. However, lumber and wood products showed an increase in shipped volumes during
January 2010, relative to January 2009.
ISM’s report on service sector activity was more upbeat; it showed that part of the U.S.
economy grew at the fastest pace in more than two years in February. While that may be true, the
three industries most closely related to the forest products industry did not participate in the
improvement (Table 1). The only mention of Agriculture, Forestry, Fishing & Hunting in the
latest ISM report was a respondent’s comment saying, “Business is okay. Customers are doing a lot
of price shopping.”
Table 1. Performance overview for Forest-Related Industries.
Data source: Institute for Supply Management
U.S. exports of wood pulp, paper and paperboard rose in December to
the highest level since January 2008, while imports fell to a new cyclical low. Exports were 33.1
percent above, and imports 18.9 percent below, December 2008 levels.
Lumber exports retreated for a second month in December, and are now well below the trend
that had been in place since December 2008. Nonetheless, December’s exports were 28.8 percent above
year-earlier levels. With another drop-off in December, lumber imports appear to have reverted to a
declining trend, after trending higher between January and August 2009. December’s imports were 7.8
percent below year-end 2008 levels.
In other paper-related trade news, the U.S. Department of Commerce (DOC) will impose tariffs
of between 3.92 and 17.48 percent on imports of coated paper from China and Indonesia after
determining that companies in those countries received unfair subsidies and harmed U.S. producers
by dumping their products in this country.
That’s a look at the past. If you would like detailed information about the future of
forest-related industries, subscribe to Forest2Market’s Economic Outlook, a 24-month forecast of
performance in GDP, currency exchange rates, housing starts, oil prices and more.
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