Multi-unit starts continue to dominate, by a much higher ratio than previously expected, reported Madison’s Lumber Reporter. For several years since the U.S. housing recovery in 2006, economists believed that the ratio of single-family starts would eventually recover to previous levels but the belief has yet to materialise. Instead, there continues to be an increase in 5-unit and especially 2-4 unit starts, while single-family starts languish at the lower ratio since 2011.
The mix of different types of building that make up the critical U.S. housing market have changed drastically since the epic U.S. home building crash of September 2006. With the trend in multi-family starts here to stay, most people in the industry have acknowledged that the industry may never return to 2.5 million housing starts annually, though there are many and varied interpretations of this new mix of US home building data.
Since multi-family starts use less wood, and different types of wood, this change in building practices is going to affect the North American sawmilling industry. Conversely, with each passing week, more building codes around the world are revised to accept multi-storey wood buildings and embark on projects using cross-laminated timber and other advanced engineered wood products. So, while the demand for standard 2x4s might not be great, that for specialty and higher-value lumber products looks very bright indeed
US housing starts report showed rising lumber prices last week and more Canadian sawmills announced closures and curtailments. This week’s benchmark lumber commodity Western Spruce-Pine-Fir KD 2×4 #2&Btr price was US$382, up another +$6, or +2%, from one month ago when it was US$346 mfbm. Narrowing the gap from the highs of summer 2018, compared to one year ago this price is down -$44, or -10%. As more sawmills announced closures and curtailments, buyers digested prior orders.
For their part, WSPF producers in British Columbia described a steady pace of sales last week, with sawmill order files stretching out to the week of October 7th on most items. Wet weather in some pockets of Alberta constricted log supply there, forcing some mills to cut production for a few days intermittently.