National Hardwood Magazine - April 2024

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ONTARIO Continued from page 12
dried stocks. At this time of year inventories are low, but
the shortage is not seen as severe.
Some sawmills have been avoiding Aspen production
as they noted there are enough supplies available
to meet demand. It is challenging to move most grades
of this species at this time. Kiln-dried Aspen demand is
weak, and inventory is available, and competition for orders
intense.
Basswood demand is slow note contacts, as it has
been for several months, due to its loss of market share
to other materials.
Birch is not selling well, said contacts, and is hard to
move. However, since sawmills have reduced producing
this species, price pressures have eased. Inventories
are high. Pricing is steady for sap Birch.
Hard Maple sales have improved somewhat, with price
gains being supply driven. Production of green lumber
is the lowest it has ever been, and poor logging conditions
are further constraining mill output. Many buyers
increased their purchases, thus pushing prices up. Kilndried
Hard Maple sales are positive, with inventories thin
as a result.
Contacts described Soft Maple sales as decent, with
inventories contracted for certain grades, thicknesses
and color.
Sales of Red Oak to domestic and international markets
are based on color premiums which is prompting
demand for this species. As supplies are higher and demand
is now higher, prices are in a firm upward trend.
Output of green Red Oak is sufficient to meet demand.
White Oak sales are strong, while kiln-dried inventories
are thin for most grades and thicknesses. Poor logging
conditions and competition for better quality logs
has been keeping supplies short, with prices lifting.
The Bank of Canada Governor said the Prime Minister
of Canada should avoid major spending increases in
his next federal budget so they don’t hinder the central
bank’s efforts to bring down inflation.
Governor Macklem said in a testimony to the House
of Commons finance committee in February, if there are
large spending increases, it could get in the way of getting
inflation back down to target on the timeline they’ve
laid out. Macklem was responding to a question about
the federal government’s upcoming budget that was due
to be released in March or April.
Overall government spending at federal, provincial
and municipal levels is now increasing about 2.25 percent
annually, which is not helping bring down inflation,
the governor said. But if spending in the federal budget
stimulates demand, it would be “particularly problematic,”
he said.
The Bank of Canada has held its key overnight rate at
a 22-year high of 5 percent in an effort to tame inflation,
even as GDP growth has been lackluster and inflation
has remained well above its 2 percent target. Inflation
was 3.4 percent in December.
The governor said unexpected developments, such as
a sudden supply chain blockage, could still force the central
bank to raise interest rates again even though now
it is more focused on when it should start to lower them.
The central bank wants to see price pressures easing
and clear downward momentum in underlying inflation
before it considers lowering interest rates, Macklem said.
The February numbers on Canada’s job market moved
the needle on when some economists think the Bank of
Canada will make its first interest rate cut. Labor numbers
released by Statistics Canada were unexpectedly
strong, with a gain of 37,000 jobs that more than doubled
forecasts. That prompted some economists who predicted
the first Bank of Canada cut in April to push back their
forecasts until June.
Economists felt that although the sharp rise in employment
in January painted a healthier picture of the labor
market than what is under the surface, the Bank of Canada
will still be concerned about the renewed decline in
the unemployment rate and the strength of wage growth.
The employment data suggests that June is more likely
for the first rate cut.
Several reasons why the data might concern central
bankers: the unemployment rate isn’t rising as quickly as
expected; it fell back to 5.7 percent in January, the first
drop in more than a year. For now, the labor market remains
fairly tight. The unemployment rate edged down,
and remains low on a historic basis, and average hourly
wage growth of 5.3 percent year-on-year is still too discomforting
for the Bank of Canada. n
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