Hardwood sawnwood included in US/China trade deal
After nearly two years of rising tariffs and animosity, the
US and China have signed phase one of a trade deal on 15
The deal contains up to US$50 billion in agricultural
purchase targets from the Chinese; a pledge to purchase
another US$78 billion in US manufactured; US$53 billion
in oil and gas purchases; US$40 billion in financial and
other services and increased protections for US intellectual
Higher tariffs, set to begin in December, have been
cancelled. The US also agreed to lower tariffs on US$120
billion worth of products. However, tariffs on US$250
billion worth of Chinese products are still in place.
A fact sheet released at the signing ceremony calls out
hardwood lumber specifically as part of the Chinese
purchasing agreement of US manufactured goods.
Hardwood sawnwood is mentioned in the agreement under
"Other Manufactured Goods." Inn the table on Page 6-11
all of the of 400 level HS Codes for hardwood sawnwood
The trade dispute had a major impact on businesses in
2019 - causing an estimated US$53 billion decline in US
imports from China and a US$14.5 billion decline in
exports to China.
Chinese furniture exports to the US fell around 20%,
wooden seat exports dropped over 20% and upholstered
wooden chair exports fell over 10%. To compensate for
the lower imports from China US importers have turned to
alternative sources such as Vietnam, whose furniture
shipments to the US have increased over 50% since 2018.
Cabinet Sales Down in November
According to the Kitchen Cabinet Manufacturers
Association (KCMA)¡¯s monthly Trend of Business
Survey, participating cabinet manufacturers reported an
increase in cabinet sales of 3% for November 2019
compared to the same month in 2018. Custom sales
increased slightly at 2.2%, semi-custom increased 3%, and
stock sales were up 3.1%.
Unfortunately, the monthly numbers tell a different story.
Cabinet sales overall were down 7.9% compared to
October 2019 with custom down 7.2%, semi-custom sales
down 8.7%, and stock sales down 7.5% compared to the
previous month. Up to November, year-on year cabinet
sales were up just 0.8% with custom sales dropping 0.4%,
semi-custom sales dropping 4.1%. However, reports show
stock sales rose almost 5%.
December decline in orders for furniture and wood
According to the latest Manufacturing ISM Report on
economic activity in the manufacturing sector contracted
in December while the overall economy grew for the
128th consecutive month.
Of the 18 manufacturing industries reported, 12 noted a
decline in new orders, with the Wood Products and the
Furniture and Related Products industries reporting the
steepest December declines among all manufacturers.
Overall, new orders declined for the fifth straight month
signaling further contraction in demand.
US homebuilding ends 2019 at highest level in 13
US homebuilding surged to a 13-year high in December as
activity increased across the board, suggesting the housing
market recovery was back on track amid low mortgage
Housing starts jumped 16.9% to a seasonally adjusted
annual rate of 1.608 million units last month, the highest
level since December 2006. The percentage gain was the
largest since October 2016. Data for November was
revised higher to show homebuilding rising to a pace of
1.375 million units, instead of 1.365 million units as
Housing starts soared 40.8% on a year-on-year basis in
December. An estimated 1.290 million housing units were
started in 2019, up 3.2% compared to 2018.
The housing market is regaining momentum after the
Federal Reserve cut interest rates three times last year,
pushing down mortgage rates from last year¡¯s multi-year
The 30-year fixed mortgage rate has dropped to an average
of 3.65% from its peak of 4.94% in November 2018,
according to data from mortgage finance agency Freddie
Single-family homebuilding, which accounts for the
largest share of the housing market, jumped 11.2% to a
rate of 1.055 units in December, the highest level since
June 2007. Single-family housing starts rose in the
Midwest and the populous South. They, however, fell in
the Northeast and West.
Existing Home Sales Surge
US home sales jumped to their highest level in nearly two
years in December. The National Association of Realtors
has reported that existing home sales increased 3.6% to a
seasonally adjusted annual rate of 5.54 million units in
December, the highest level since February 2018. Existing
home sales rose in the Northeast, West and the populous
South, butt sales fell in the Midwest.
Existing home sales, which make up about 90% of US
home sales, surged 10.0% on a year-on-year basis in
December. For all of 2019, sales were unchanged at 5.34
US created over 2 million jobs in 2019
The US economy created 145,000 jobs in December 2019
to end 2019 with the ninth straight year in which new hires
topped the 2 million mark, but workers still aren¡¯t reaping
a windfall from the strong labour market through rising
The increase in new jobs fell short of the 165,000 forecast
by economists polled by MarketWatch. Reports show
most of the new jobs are being created in the large service
side of the economy.
Retailers created 41,000 jobs, hotels and restaurants
boosted staff by 40,000 and the health-care industry added
28,000 workers. In contrast, construction companies hired
The economy created 2.1 million jobs for the full year,
down from 2.7 million in 2018. Much of the decline
reflects a slower US economy and a slump in
manufacturing, but the tight labour market has also made
it harder for companies to fill open jobs.