BULLISH REPORT FROM CB
The Conference Board of Canada provided the country’s forest products companies with some positive news this week when they said much of the wood products sector has returned to profitability.
The statement was part of the organization’s Summer 2010 Canadian Industrial Profile report, which is published in collaboration with the Business Development Bank of Canada.
“In the near-term outlook, we do expect to see some growth (in the wood and paper products industries), and do expect a return to profitability,” said Michael Burt, the Conference Board’s associate director for industrial economic trends.
Burt added that increased shipments to Asia and a post-recession rebound in Canadian new home construction have benefitted the industry. The recovery of housing starts in the United States, although slow, is expected to increase demand for Canadian structural lumber and could result in profits of $1 billion annually for Canadian companies.
Burt cautioned that the recovery will be gradual, adding “we don’t expect either segment to return to their peak levels of production or employment.”
In B.C., Forests and Range Minister Pat Bell said he has a muted optimism based on how many mills are running in the province and the modest investments companies are making to improve their operations.
“Those are all pretty positive signs that the forest industry is in recovery,” he said. “And the next couple of years will probably lead to some pretty strong economic times for them.”
On the logging side, Bell predicted forest companies will cut about 45 million cubic metres of timber this year, which is up from 40 million in 2009, but still down substantially from the peak of about 70 million cubic metres in the mid 2000s.
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