TD is predicting a significant increase in lumber prices by 2013 – and has praised British Columbia’s government for opening up new markets to counteract the slump in the U.S. housing market.
Leslie Preston, an economist at the TD banking group, stated that, “The B.C. industry and government have been very proactive in marketing wood for use in construction in China” and that “China now imports more lumber from B.C. than from the United States.”
Preston says that by late 2013, improved demand from the U.S. will combine with growing demand from China “to produce a significant cyclical upswing in demand for lumber.”
The economist added that demand from China is conservatively predicted to grow by 10 per cent each year until 2015.
In May and June, the value of B.C. exports to China was greater than to the U.S. Shipments to China in May were more than $122 million, and in June more than $130 million.
Why it matters
- B.C. is one of the world’s largest exporters of softwood lumber.
- More than 55, 000 people are employed by the industry.
- The forestry industry contributes more than $7.3 billion to the province’s gross domestic product.
- B.C. has more than 110 lumber mills.
- In the past year-and-a-half, 27 sawmills have reopened throughout the province.
- B.C. has shipped more than 13 million cubic metres of softwood lumber around the globe this year, worth more than $2.2 billion, representing a nine per cent increase on 2010.
- Last year, B.C. exported almost $700 million in lumber products to China, up from less than $40 million in 2003 – an increase of 1,700 per cent.
- The B.C. government has trade and investment offices in Shanghai, Beijing and Guangzhou.
- The Province also has a market development office for wood products in Shanghai and a satellite office in Beijing.
- B.C. plants an average of 200 million trees each year.
- The report can be viewed at: http://www.td.com/document/PDF/economics/special/lp0911_lumber.pdf
- Specifics about the Province’s job plan can be seen at: www.bcjobs.ca
- To learn more about British Columbia’s China strategy: www.bcfii.ca