Where Is Economy Headed? Implications for Southern Forestry!!. Dr. Lynn O. Michaelis—Executive Adviser, RISI Presentation to SCFA Annual Meeting November 3, 2011. Where We are Going Today!. Understanding the situation: WHY? Economic and housing outlook Translation to wood products demand
Dr. Lynn O. Michaelis—Executive Adviser, RISI
Presentation to SCFA Annual Meeting
November 3, 2011
“An unusually uncertain environment”
Translation: flying blind
source of global financial crisis
Source: Fed, RISI
Starting point (April 2011) was 2.9% GDP growth and 3.4% in 2012
If headship rate had been stable: another 2 million household or 400,000/ year in housing demand
* Net removals assumption: 500,000/year
Reference: 100,000 single family units need 1.5 billion bf lumber and 1.1 billion sq. ft. of OSB
*At 65.9% in 2011.2 and falling
SPF reflects export market
SYP closes on SPF
*based on RISI mill surveys
West benefits from China domestic market
while the South remains depressed…
(Delivered Sawtimber Prices Compared, $/MBF, Scrib., qtrly)
*Third quarter is based on July average.
**Assumes 7.5 short tons per MBF.
25% ofharvest demand
Note: Includes Alaska
(BBF, Softwood Sawtimber Demand*)
Western mills benefits from log exports
Slower demand recovery in South
*Coast and Inland region combined.
SYP Stumpage, $/GST
When will be get to “trend” demand?What will be capacity/harvest limit?
Beetle kill is a constraint on BC Harvest long-term