Timber business suffers as home building slows

By Christine Souza

Timber operators headed into 2020 with a bit of optimism, due to increased demand for harvested logs and lumber products related to growth in home construction or home starts, the main end-use market for lumber. That enthusiasm came to an abrupt halt in mid-March, as the COVID-19 pandemic affected the U.S. economy.

Even though state and federal governments identified the wood products and construction sectors as essential, concerns about the uncertain economy and rising unemployment brought a slowdown in home construction that has hit the timber business.

Lumber market analyst Paul Jannke, principal of timber for Massachusetts-based Forest Economic Advisors, said from a forest products perspective, “Before COVID, housing starts were back up above underlying demand levels where they hadn’t been in over a decade. Then coronavirus hit, and housing gets absolutely crushed.”

From December of last year through February 2020, housing starts nationwide rose to a seasonally adjusted annual rate of about 1.6 million units, Jannke said, “and we finally hit our stride.” He said a single housing unit, on average, requires 15,000 board-feet of lumber.