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NHLA NEWS SIGNS INDICATE
NHLA NEWS SIGNS INDICATE SLIGHT DOWNTURN FOR HARDWOODS IN 2015 There is some discussion that 2015 could see a slowdown; this is in keeping with the normal economic pattern dictating that every few years there will be a recession. As we know, these are not normal economic times. With half of the grade lumber going to a mix of overseas markets primarily dominated by China, maybe those historic patterns don’t mean as much as before. Although China is significant in size, the North American Hardwood industry has diversified into other countries with strong potential in Vietnam and throughout Southeast Asia. Europe remains in the doldrums for now and probably through early 2015, but how soon before these middle class countries rebuild and begin to demand high quality Hardwood products that come from North American forests? Domestic demand for grade Hardwood is closely linked with the housing industry, since the three primary Hardwood products (floors, cabinets and mouldings) are destined towards new homes. U.S. housing is showing a steady improvement, and still has a long way to go before reaching the record numbers of the mid 2000’s indicating there is a potential for growth. Any slowdowns in 2015 could come with a stall in housing construction, which will likely mean at best a flat market next year. Considering where the industry stands today as compared to a year ago, flat may look pretty good. Demands from the industrial markets, which now consume about two-thirds of the total Hardwood production, remain robust. Pallets, ties and Hardwood road mats show no signs of declining with genuine concern in the early part of 2015 about whether they will have an adequate supply to fill their needs. The biggest fear is that unable to fill their markets they may opt to go with substitute materials, however this does not seem in the cards for either tie or pallet producers who still prefer wood. An industry observer reminded me that our industry is one that prides itself in still doing things the old way. In the long run, the Hardwood industry needs to find new ways. At the recent NHLA Convention, business consultant William Taylor stated, “Modern manufacturers cannot survive simply by outperforming their competitors. The keys to success are to discover new growth markets and the development of other uses for our products.” The biggest question mark of 2015 seems to be finding enough loggers, mill workers and truck drivers to deliver product to the markets. Trees are plentiful and we know how to make high quality lumber; we just need trained people to make the Hardwood businesses run. Our hope is that NHLA will be your partner in solving problems and exploring new opportunities. By our estimate, 2015 should be one of the better ones in recent history, and we wish you the best for a prosperous and happy new year. ■ BY MARK BARFORD, CAE, EXECUTIVE DIRECTOR, NATIONAL HARDWOOD LUMBER ASSOC., MEMPHIS, TN 901-377-1818 www.nhla.com About the NationalHardwood Lumber Association The world’s largest and oldest Hardwood industry association, NHLA represents more than 1,200 companies and individuals that produce, use and sell North American Hardwood lumber, or provide equipment, supplies or services to the Hardwood industry. It was founded in 1898 to establish a uniform system of grading rules for the measurement and inspection of Hardwood lumber. Since 1980, its headquarters have been in Memphis, TN. To learn more about NHLA, please visit www.nhla.com. 14 CHRISTMAS 2014 ■ NATIONAL HARDWOOD MAGAZINE
