bc-forest-industry-economic-impact-study

Volume (cubic metres)
Housing Starts (thousands)
Number of Housing Starts
(thousands)
45
APPENDIX D – ECONOMIC AND OTHER FACTORS AFFECTING THE INDUSTRY
While there are many economic factors that affect the financial performance of the industry, the principal
ones are: housing starts in the United States and Asia, foreign exchange rate fluctuations, energy costs,
and transportation costs. The following sections contain an overview of the effects of these factors.
Housing Starts – United States
The United States is the largest export market for BC wood products, with demand being driven by
residential construction. Consequently, the number of US housing starts is a strong indicator of the US
demand for BC wood products.
At present, US housing starts have been in the range from 0.9 to 1.0 million units. This represents a
significant recovery from the low of 478,000 starts in 2009, and is moving toward the 10 year average of
1.2 million starts and the 24 year average of 1.3 million starts.
Figure D-1: US Housing Starts since 1990
2,500
2,273
2,000
1,500
1,000
500
798
478
1,333
1,154
909
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Annual Housing Starts 24-year average (1990 to 2013)
10-year average (2004 to 2013)
Source: US Census Bureau, Seasonally Adjusted Annual Rate
Figure D-2 depicts the relationship between US housing starts and BC exports of softwood lumber. The
chart highlights the historical dependency of BC’s lumber manufacturing sector on the market in the
United States.
Figure D-2: BC Lumber Export Volumes Driven by US Housing Starts
35,000,000
2,500
30,000,000
25,000,000
20,000,000
2,000
1,500
15,000,000
10,000,000
5,000,000
1,000
500
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
YTD
0
BC Softwood Lumber Exports Volume
US Housing Starts
Source: BC Stats, US Census Bureau
BC FOREST INDUSTRY: ECONOMIC IMPACT STUDY
MNP LLP