Industry At a Glance: From Forest2Market’s July 2010 Economic Outlook

In June, performance in forestry-related industries was mixed (see table). Changes in Wood Products were almost universally negative, a situation confirmed by one respondent who observed that the “market had begun to change [for the better], but it is now declining again.” Metrics for Paper Products, on the other hand, were largely positive.

The performance of forestry-related service industries showed some positive signs, with Real Estate, Rental & Leasing; Construction; and Agriculture, Forestry, Fishing & Hunting all reporting overall growth.

Table 1. Performance overview for Forest-Related Industries.

Data source: Institute for Supply Management

Forest2Market’s housing market forecast continues to remain weak. Our current 12-month outlook for housing starts, for instance, shows starts topping 600,000 (on an annualized rate) by the end of 3Q2010, and remaining in the 635,000-710,000 range through this time next year.

The Paper Products industry, which generally tracks GDP, will also face challenges. Forest2Market’s GDP forecast shows modest GDP growth through 1Q2011. Many observers of the economy believe that the second leg of a double dip recession will take hold in the last half of 2011, sending GDP into negative territory.

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