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US housing starts recover slightly in November
Privately-owned housing starts recovered 6.7% in November to a seasonally adjusted annual rate of 1.59 million units, according to the US Commerce Department. This was, however, 26% below the pace of a year ago. The recovery was due to an 8.1% jump in the single-family
sector, which accounts for about 80% of the houses built. The chart below shows that privately-owned housing starts have plunged 30% since January 2006. Meanwhile, building permits (down 3% from October) and housing completions (down 0.2%) fell in November.
Slumping US housing market subdues lumber demand
Demand for lumber is being affected by the rapid decline in the US housing market, according to Wood Markets. Total US housing starts are estimated to fall 13% to 1.8 million units in 2006 and forecast to decrease by at least another 11% to about 1.6 million units in 2007, before bottoming out about mid-year, according to the publication. Consequently, softwood lumber consumption in North America (USA and Canada) is now expected to slide 4% to 72.8 billion board feet (bf) in 2006 and forecast to drop another 4% to 69.5 billion bf in 2007.
About 1.6 billion bf of the 6 billion bf decline would probably come from reduced imports mainly from Europe while the balance would be the result of lower North American production. Weak prices are expected to continue due to excess softwood lumber capacity unless a more aggressive rate of curtailments and/or closures occurs.
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