B.C. PRODUCTION DROPS
Despite a 2.6 per cent decline in British Columbia’s sawn lumber production for February 2011, the province’s production is still up compared to the last three years.
The figures were delivered in a Vancouver Sun newspaper column last weekend by Bryan Yu, an economist with Central 1 Credit Union. Yu said, “Following flat activity in the first three quarters of 2010, production has trended higher in recent months, led by a continued increase in production in the coastal and southern interior regions. Activity in the northern interior, which forms the largest share of provincial production, has stayed flat since the beginning of 2010.”
Yu went on to say that the February declines were seen in all regions of the province, “with all regions observing lower levels of activity.” Coastal production, which had a 7.9 per cent increase in January, declined by 6.5 per cent in February. The central interior had a second straight month of declines in February, falling 3.8 per cent.
While predicting the United States will remain B.C.’s largest market for lumber over the long term, Yu says through February, year to date exports of softwood lumber to our southern neighbors (by dollar volume) was $251 million, down 8.3 per cent from 2010. Meanwhile, exports to China hit $138 million in what Yu says is “a stunning 138 per cent.”
Yu added that in 2010, lumber export volumes to China more than doubled to $668 million, while log exports to China more than quadrupled to $39.6 million over the first two months of this year.
“While it is clear that a significant recovery in the U.S. housing market – which is still a ways off – will be necessary for a full recovery in B.C.’s lumber market, continued growth in the demand from emerging markets will provide support in the medium-term, and a cushion during down-cycles in the future,” Yu adds.
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