Lumber production in British Columbia rose through the first quarter, according to the latest estimates from Statistics Canada. However, the trend in production remains downward, due mostly to declining housing construction in the United States but also to trade restrictions and the rising Canadian dollar.
Exports of B.C.-origin softwood lumber are also trending downward, with the relatively minor exception of sales to developing economies where growth is rapid.
B.C.’s sawmills produced 3.4 million cubic metres of lumber in March, up 223,000 (6.9%) from February, but down 345,000 (9.1%) from March 2006. Seasonally adjusted production totalled 3.2 million cubic metres in March, up a slight 18,000
(0.6%) from February, which had seen a 1.8% monthly decline after a 5.2% increase in January.
In the first quarter, sawn lumber production in B.C. totalled 10.1 million cubic metres, down 947,000 (8.6%) from the first quarter of 2006.
The downward trend in lumber production is fairly consistent in B.C.’s four major forest regions, with two notable exceptions. In the Coastal Forest Region, which includes Vancouver Island, production is relatively weaker due to long-term downward trends in old-growth timber harvests and lack of investment in modernized mills. In contrast, production in the Central Interior Forest Region,
which includes Williams Lake and Quesnel, has begun to trend upward.
Exports of B.C.-origin softwood lumber are following the same trends as sawmill production, driven lower by declining U.S. housing starts, trade restrictions and the rising value of the Canadian dollar. Developing economies outside of the U.S., Japan and Europe are a relatively tiny but rapidly growing market for B.C. lumber exports.
Worldwide exports of B.C.-origin softwood lumber were down $290 million (18.4%) in the first quarter compared to the same period a year earlier. This follows declines of $423 million (6.7%) in 2006 and $623 million (9%) in 2005.
B.C. softwood lumber exports to the United States fell $293 million (24.1%) in the first quarter from the same period last year, following declines of $482 million (10%) in 2006 and $274 million (5.4%) in 2005. Exports to Japan dropped $37.9
million year-over-year, after an increase of $20 million (2.1%) in 2006 and a decline of $295 million (23.3%) in 2005.
On a brighter note, exports of B.C.-origin softwood lumber to the European Union rose $8.5 million (16.6%) over the same period last year. This follows an increase of $20 million (9.4%) in 2006. Meanwhile, softwood lumber exports to the rest of
the world in the first quarter were up $32.2 million (50%) year-over-year.
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