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NHLA News Future Of
NHLA News Future Of North American Hardwoods Dependent On More Than Housing I recently heard an experienced Hardwood lumberman say, “If I survived the last five years, I can survive anything.” With the Hardwood industry still stuck in the mire of years of tough business, people really want to know what future demand will be for North American Hardwoods. I share in others optimism that despite the fact that production of Hardwood lumber remains significantly down from our historic highs of ten years ago, much of the overall capacity of the industry remains intact. When demand does increase, the Hardwood lumber industry will be able to quickly grow to meet the challenges of increased production. When will that demand return? That seems to be the big question. An old Arabic saying may give us some insight here. “Those who claim to know the future are lying ... Even if by chance they are right!” The common assumption when talking with the industry is that recovery will be dependent upon the increased construction of new houses. When you realize that most upper grades of Hardwoods are going into flooring, cabinets, millwork and furniture it is an easy connection to make. But based on recent trends, it appears that exports of Hardwood lumber will likely be leading the way as one of the early returning markets. The accompanying chart is put together by the staff at the Weekly Hardwood Review based on data from the U.S. Department of Commerce. It shows an increase in the total volume of exports despite industry production being cut in half during this past decade, and most interesting is the stark changes in where in the world grade lumber is going. China and Canada have switched from the No. 1 to No. 2 roles, with a nearly tripling in volume to China. Vietnam which was barely a blip on the screen 10 years ago now ranks third. by MARK BARFORD, CAE Executive Director NationalHardwood Lumber Assoc. Memphis, Tenn. 901-377-1818 www.nhla.com Hardwood Lumber Exports 2001 2011 (projected) • Total 1,100 Million BF 1,200 Million BF • Canada 385 238 • China 160 450 • Vietnam N/A 100 • Mexico 79 96 • Europe (top 3 countries) 196 125 Whenever overall markets do turn around, the industry will continue to face some challenges that it will need to overcome. First and foremost may be persistently narrow margins, a significant increase in custom orders for lumber, and the extreme depreciation of both machines and people (when was the last time you sent your employees off for training?). One last quote from Billionaire George Soros, “I know I am bound to be wrong, and therefore am likely to correct my mistakes.” The companies that have learned how to correct mistakes are still here today. They know that instead of waiting for housing to return, the survivors will expand their horizons to all markets to be part of the future of the North American Hardwood business. 10 Hardwoods Have Resiliency
