National Hardwood Magazine - November 2023

MUELLER BROTHERS TIMBER,

MUELLER BROTHERS TIMBER, INC. Tracey Mueller, Log Procurement; Kevin Mueller, Mill Manager; and Randy Mueller, Sales SAWMILL AND TWIN BAND RESAW Manufacturers of: 4/4 - 8/4 Grade Lumber SPECIALIZING IN PLAIN SAWN: • WALNUT • COTTONWOOD • SYCAMORE • HICKORY • RED OAK • WHITE OAK• SOFT MAPLE • HARD MAPLE • ASH 400,000’ DRY KILN CAPACITY 1,000,000’ DRY STORAGE PLANER STRAIGHT LINE RIP GANG RIPPING DOUBLE END TRIM EXPORT PACKAGING CONTAINER LOADING Grooved sticks used on all whitewoods and White Oak. P.O. BOX 175 OLD MONROE, MO 63369 PHONE: 636-665-5193 FAX: 636-665-5812 Email: randy@muellerbros.com www.muellerbros.com NHLA ONTARIO Continued 2023 (94,400) before ramping up to 98,800 in 2024. Fuelled by falling interest rates and government incentives, next year’s expected housing start activity would represent the largest addition since the mid-1980s. Quebec’s economy lost substantial momentum this year. It likely contracted slightly in the second quarter amid mine closures, markedly softer construction activity, and a stalling manufacturing sector. The province is expected to continue to walk a thin line between positive and negative growth through the remainder of this year, and into 2024. The growth forecast is at just 0.5 percent overall in 2023— down materially from 6.0 percent in 2021 and 2.6 percent in 2022—and further decelerate to 0.4 percent in 2024. One clear outcome of the slowing pace is an easing labor market tightness. Job vacancies and employment are down so far this year—falling 36,000 and 7,000, respectively, since January—with all the loss in employment among full-time workers. The unemployment rate is trending higher, reaching 4.3 percent in August from a modern-day low of 3.9 percent at the start of this year. The job outlook erosion, mixed with sharp increase in cost of living, is beginning to take a toll on consumers. Quebecers’ spending at retail stores has weakened since spring, especially on things like furniture, building materials, sporting goods and garden equipment. And they’ve been pulling back a little at food and drinking places too. RBC expects that toll to grow heavier in the short-term while high interest rates maintain intense pressure on borrowers in the province. Wildfires in June also hammered the province. Several mines were forced to suspend or halt production. Though most have resumed operations, it’s unlikely the province will be able to make up the loss over the second half of the year. That pressure is plainly visible in the housing market where demand—while recovering from pandemic lows—continues to be soft. Housing construction has slumped as a result. Residential construction investment was off 31 percent in the first half of this year, and housing starts were down 40 percent. RBC believes a further (slow) recovery in the housing market and policy efforts to narrow the supply gap will reinvigorate home building activity to some degree next year. With all of these events and recent natural disasters across the country, it has certainly taken a toll on the Hardwood industry in all sectors. It is harder for businesses to keep going and survive, remain operational, and eke out a profit, as they face more and more obstacles in these challenging times. (Editor’s note: all financial and economic data reported in this article represent the most current data available at the time of this writing.) n QUEBEC Continued from page 8 Availability of green supplies seem to be sufficient at this time to meet current needs. Kiln-dried supplies were contracting and so buyers ramped up their purchases resulting in prices rising. Soft Maple sales continue to be elusive with little improvement lately. Sawmills have also cut back on producing this species and so supplies are lower. Some expressed concern there may be shortages for this species over the winter. Cherry demand remains low both on domestic and international markets. Decent demand from China is sustaining Cherry sales. For some contacts Ash is doing well, with green Ash production having slightly improved in certain areas. Kiln-dried Ash is seeing interest from China. On the domestic front demand is fair but not robust. Basswood supplies are still outpacing demand, although since production was reduced in many areas, current supplies have lessened thus reducing its quantity on the marketplace. Kiln dried products are available, noted contacts. Some flooring producers have reduced their purchase of Hickory and Oak as the housing market in Canada and the U.S. has slowed. New home construction figures are down in Canada as interest rates for mortgages have gone up in the past year. There is competition from plywood producers who are purchasing higher quality grade White Oak logs, thus flooring plants and sawmills are struggling to get adequate supplies. Also, a host of different floor coverings are vying with Hardwood flooring products’ market share. On the other hand, some flooring manufacturers in the residential and truck trailer sectors have been buying Nos. 2A and 3A Red and White Oak as business is improved slightly. According to housing market forecasts, higher interest rates continue to cool Canada’s housing market following the solid rebound in spring. August marked the second-straight month home resales dipped (down 4.1 percent from July) and home price gains moderated. Earlier tight demand-supply conditions eased further as the number of homes put up for sale rose again slightly. Most local markets have sharply rebalanced by now. RBC thinks the cooling trend will extend into the fall despite the Bank of Canada (BoC) pausing its rate hike campaign. Activity in home resales in Quebec hit a soft patch. Month-over-month sales activity contracted across all comparative market analysis (CMAs) except Trois-Rivières. On the supply-demand side, most markets in British Columbia, Ontario, and parts of Quebec and Atlantic Canada are in balance territory. Please turn the page For 30 years, Thompson Appalachian Hardwoods, Inc. has manufactured and exported the highest-quality Appalachian hardwood lumber and logs. We have a firm commitment to steward our forests as well as our customers, employees, and families—and it is in this commitment that we are deeply rooted. Rooted In Commitment 52 NOVEMBER 2023 n NATIONAL HARDWOOD MAGAZINE RealAmericanHardwood.com/industry RealAmericanHardwood.com/industry NOVEMBER 2023 n NATIONAL HARDWOOD MAGAZINE 53 Sales Todd Nelson todd@thompsonappalachian.com Chip Underwood chip@thompsonappalachian.com Juan Quintanilla juan@thompsonappalachian.com 100 Harless Drive Huntland, Tennessee 37345 USA Office 931 469 7272 thompsonappalachian.com