The Wood and Fiber Supply Chain Experts
Industry At a Glance: From Forest2Market's Economic Outlook
From the July 2010 Forest2Mill newsletter.
Factory output continues to be a bright spot, but construction
spending – especially the residential component – is unlikely to add substantially to GDP growth
for quite some time.
Although the Institute for Supply Management’s reports on manufacturing and service-sector
activity showed stable or slightly slower rates of growth in May, new orders across all of the
industries related to the forest products sector showed promise (Table 1).
Table 1. Performance overview for Forest-Related Industries.
Data source: Institute for Supply Management
New orders were up across the board in these industries. Most of
those new orders were placed by domestic firms, though, as new export orders were less robust. The
lack of export orders is not surprising in light of recent dollar strength; continued appreciation
will likely undercut U.S. exports and reduce domestic manufacturers’ market share of the U.S. and
global markets.
Inputs cost more in May, although the price increases were smaller than in April.
Commodities whose prices rose in May included corrugated products and containers, fuel, lumber and
wood products, paper and paper products, and pulp.
Across all industries, the U.S. Census Bureau reports that shipments, which have gained
ground ten of the last eleven months, increased $2.5 billion or 0.6 percent to $422.3 billion.
(Table 2).
Table 2. Shipments, Inventories & New Orders, by Industry.
Data source: U.S. Census Bureau
Shipments of wood products rose 4.9 percent, to $7.3 billion dollars—t he fourth consecutive monthly increase. Paper products shipments took a breather after rising for seven months and remained unchanged (Figure 1).
Figure 1. Value of Shipments, by Industry.
Data source: U.S. Census Bureau
Data from the Association of American Railroads provides another (and in this case, more pessimistic) view of shipping activity in the United States. Rail traffic fell by double-digit percentages in April, relative to March, but most categories are still well ahead of year-earlier volumes (Table 3).
Table 3. US Rail Traffic, by Commodity
Data source: Association of American Railroads
Inventories, up six of the last seven months, increased $2.6 billion (0.5 percent) to $521.7 billion (Figure 2). The inventories-to-shipments ratio was unchanged at 1.24. Inventories of manufactured durable goods increased 0.7 percent, thanks to primary metals. Wood products inventories backed off 0.7 percent, after four months of increases, while paper products rose 1.0 percent.
Figure 2. Value of Inventories, by Industry
Data source: US Census Bureau
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Additional Stories from the July 2010 Forest2Mill Newsletter:
Housing
Market Update
Will New
Industrial Boiler MACT Standards Affect You? Act Now.
Pacific Northwest
Update
USDA
Approves ArborGen Tests: Location of Genetically Modified Eucalyptus Test Sites
Biomass
Harvest Guidelines