Don’t Be Surprised if Lumber Prices Change

As wildfires continue to rage through portions of Alberta, Canada, many are wondering how and when things will return to normal for thousands of area evacuees. Aside from safety concerns for those who live and work in the fire-plagued region, NAHB and its members are anxious to see what impact, if any, the fires will have on the housing industry.

For one, NAHB economists and other industry experts say they wouldn’t be surprised if supply chain problems lead to higher lumber prices in the near term, depending on the extent of the damage. However, they also note that recent history has shown minimal evidence of a correlation between forest fires and lumber prices.

“It’s been our observation that fire season rarely has a profound effect on the lumber market, even in really bad fire years,” said Shawn Church, editor at Random Lengths Publications, a leading forest product market research company.

firefighters helped battle a wildfire

In his 26-year career keeping tabs on the wood products industry, Church recalls only one fire season (2003) that had a direct impact on the market, though several other factors were already affecting supply and demand at that time.

But he is careful not to overlook the potential impact large wildfires could have on the market, noting how a fire that consumed a trestle bridge late last month is affecting distribution out of two mills in Alberta.

“This early-year fire danger and volatile start to the season serves notice to the industry that Western Canada could be in for a serious fire season,” Church said. “There are also a number of other wildfires burning in Northern British Columbia, so you never know – it could potentially impact harvesting, production and distribution down the road.”

In its recent Seasonal Fire Assessment and Outlook, the National Interagency Fire Center (NIFC) predicted parts of British Columbia, Alberta and Saskatchewan would see an increase in fire activity due to drought conditions.

NIFC expects those fire danger levels to continue with persistently “strong winds and abnormally dry, warm weather,” but sees conditions returning to seasonal norms heading into the summer.

For consistent updates on the ever-changing lumber market, as well as additional housing data, go to nahb.org or eyeonhousing.org.

Tags: , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement