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Report
from
North America
Study shows market conditions for wood products
improved in 2010
Market conditions improved slightly in 2010 for the wood
products industry but the housing market is expected to
remain challenging into 2012, according to a study by
Virginia Polytechnic Institute and State University, the
USDA Forest Service and the Journal Wood & Wood
Products (Wood & Wood Products, July 2011).
An over-supply of single-family homes and the high
number of foreclosed properties are keeping new
construction at very low levels. In the first quarter of 2011,
construction of single-family homes was 75% lower than
at the peak in 2005.
Wood product manufacturers shift attention to home
renovation sector
In this difficult market wood product manufacturers have
shifted their attention to the home renovation sector since
spending on remodelling and other improvements has
remained quite stable.
The study¡¯s survey of wood product manufacturers
showed that sales improved in 2010 over 2009, but market
conditions in the US remain difficult. While the home
renovation market, non-residential construction and multifamily
home construction contributed to sales in 2010,
single-family home construction has historically been the
major driver of wood product demand in the US.
Demand for new single-family homes is expected to
remain subdued in the foreseeable future.
Competition from offshore manufacturers of wood
products was not perceived as a major problem for US
wood product manufacturers. Only 20% of respondents
reported increased use of imported wood in their product
lines.
Most of the imported wood is purchased as lumber or
components (64% of respondents), 13% import finished
products and the remainder of the respondents import both
lumber and finished products.
The majority of firms report an increased interest by
customers in green building products. Custom production
continues to be important with almost 70% of respondents
making the majority of products to order, which includes
semi and mass customisation.
Furniture sales suffer from poor housing market
With furniture demand so closely tied to the housing
market, US furniture sales continue to recover only very
slowly. The Furniture Buying Index dropped in June back
to February levels after a brief surge in April, according to
America¡¯s Research Group who compiles the index each
month from interviews with 5,000-8,000 consumers across
the country.
According to US Census Bureau figures, overall retail
sales increased slightly by 0.2% from May to June and
were 8.5% above last year. However, sales of furniture
and home furnishing declined again in June, down 0.8%
from May and only 0.5% above June 2010.
The monthly survey of residential furniture manufacturers
and distributors carried out by Smith Leonard indicates
positive developments in April and May 2011.
New orders by US furniture manufacturers and distributors
increased by 8% from the same two months a year ago
according to the most recent survey. Year-to-date, new
furniture orders were up 5% compared to 2010. Furniture
shipments increased by 8% from April to May, and yearto-
date, shipments were up 3% over 2010 levels.
There was a slight decline in furniture inventories, but
levels are still high at 11% above May 2010, although last
year, manufacturers and distributors had higher than
expected orders and many were short on inventories.
Inventories are expected to come down this summer as
shipments increase.
Final antidumping duty set for 30 wooden bedroom
furniture manufacturers in China
The US Department of Commerce assigned the final
antidumping rate of 41.75% to thirty manufacturers of
wooden bedroom furniture in China in its annual review,
according to the trade journal Furniture Today. The duties
apply retroactively to the companies¡¯ 2009 shipments to
the US.
The thirty companies were deemed eligible for a separate
rate status by the Department of Commerce and had
previously received a preliminary rate of 16.24% for their
2009 shipments. However, the final analysis raised the rate
to 41.75%. Twelve other companies did not qualify for
separate rate status and were assigned final duties of
216.01%.
The antidumping duties are assigned to the manufacturers
in China, but they are paid by the importers into the US.
US complaint about timber pricing by Canadian BC companies
The US filed a complaint in January 2011 that the volume
of salvage logs in the province of British Columbia,
Canada has risen beyond reasonable limits.
Forest companies are charged a royalty of only $0.25 per
cubic metre for salvage logs from public forests in British
Columbia. Canada refuted the claim of under-pricing and
justified the increase in volumes of low-grade logs
because of the mountain pine beetle epidemic that resulted
in large volumes of poor quality logs.
In early August the US Trade Representative made its case
at the London Court of International Arbitration that
British Columbia is subsidising timber prices contrary to
the Softwood Lumber Agreement between the two
countries. The international tribunal is expected to take
about one year to rule in the case.
National sawn softwood research and promotion
programme comes into effect
The US Department of Agriculture (USDA) announced on
August 3 that the ¡°Softwood Lumber Research,
Promotion, Consumer Education and Industry Information
Order¡± is now effective. The so-called check-off
programme seeks to increase domestic sawnwood
consumption through generic marketing and research. A
majority of US sawn softwood producers and importers
voted in favour of the programme earlier this summer.
To finance this effort, starting in January 2012, companies
will pay US$0.35 per thousand board feet produced or
imported into the US, excluding volumes below 15 million
board feet. Exports will also be excluded from the fee.
The goals of the promotion programme include increasing
the use of wood in non-residential and multi-family
construction and regaining market share in outdoor living
products (decking, outdoor furniture, etc.).
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