National Hardwood Magazine - September 2022

ONTARIO Continued from page 14
overseas shipping delays and shortage of truck transport.
However, it was noted that Hardwood supplies were
climbing.
With Ash trees being affected by the Emerald Ash Borer,
supplies of this species did not increase, but output
was sufficient to meet demand. Prices for green stocks
were firm and kiln-dried Ash markets were keeping inventories
at manageable levels.
With the ongoing heat wave over the summer months,
mills have a steady flow of logs and sawmills are busy
prioritizing production of the high valued whitewoods
such as Hard Maple, requiring mills to ship lumber as
soon as it was sawn to avoid stain damage. As prices
for kiln-dried Hard Maple have been softening, many
businesses were taking a cautious approach to buying.
It was reported that green Hard Maple prices were lower
due to ample supply and controlled rates of purchasing.
Soft Maple demand continues to be strong for finished
goods with production sufficient to meet demand.
With whitewoods taking the priority, Aspen was not
a high production species over the
summer, and so supplies were not
quite meeting demand. Prices were,
thus, higher for the common grades,
and kiln-dried inventories were reported
as thin.
Basswood production improved,
noted contacts, as sawmills worked
to keep whitewood log decks rotated.
This increase stabilized prices,
but developing supplies were not
overwhelming the markets, so demand
for this species is good. Kilndried
Basswood demand is solid
particularly for No. 1 Common and
Better, and some sales contacts reported
competition had increased for
kiln-dried Basswood.
Birch supplies are tight, commented
contacts, as Birch serves as a
standalone and as an alternative to
Maple. Most contacts said inventories
were low with steady demand
for this species. Prices were noted
as higher for kiln-dried inventories,
thus prices had risen. As well, green
lumber production was not meeting
buyers’ needs for most grades and
thicknesses.
Demand for Red Oak has decreased
both domestically and on international
levels. Although production
of this species is not high, it is
enough to meet demand, thus prices
have gone down slightly.
According to published statistics,
White Oak rose the first five months
of this year, with shipments slowing
in June and July as European
countries prepared for summer vacations. It was noted
the upper grades had softened, affecting pricing. Green
production was not high, and mills and wholesalers are
shipping out production.
The Bank of Canada raised its key interest rate a full
percentage point on July 13, marking the largest single
rate hike since August 1998. This was to bring skyrocketing
inflation, which hit a 39-year-high of 7.7 percent in
May, down to its two percent target.
In its latest monetary policy report, the Bank of Canada
said inflation in Canada is “largely the result of international
factors,” but that “domestic demand
pressures are becoming more
prominent.”
The hike brings the rate to 2.5 percent
and is expected to prompt commercial
banks to raise their prime
rates which will increase the cost
of loans linked to the benchmark,
such as variable rate mortgages and
home equity lines of credit.
The central bank said the largest
drivers of global inflation are the
Russian invasion of Ukraine and ongoing
supply disruptions, leading to
higher global energy and food prices.
Domestically, the Bank of Canada
said “further excess demand has
built up,” citing tight labor markets
and strong demand. This is allowing
businesses to pass more of their
cost increases on to consumers, the
bank said.
Economists said while the announcement
may have come as
a surprise, it wasn’t unreasonable
given the rate of inflation, rising inflation
expectations and the tight labor
market. They state that an economy-wide
recession is unlikely in
2022, adding that economic indicators
still point to a healthy economy.
The unemployment rate fell to a
record-low of 4.9 percent in June
as businesses continue to struggle
with an ongoing labor shortage. The
central bank is also citing concerns
about rising inflation expectations
among consumers and businesses.
Economists generally worry when people begin expecting
high inflation, as those expectations then feed into
future prices set by business and wage negotiations.
The bank is hoping to rein in inflation, referred to as
a “soft landing,” where inflation is brought under control
without triggering a recession.
The Bank of Canada’s most recent business outlook
survey showed Canadians believe inflation will remain
higher than previously expected — and for a while. Canadians
expect inflation to be at four percent five years
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