The Canadian Housing Industry Economic Update Monthly Report on Lumber Prices May 2011

Lumber prices have been volatile this spring, but Canada’s
new home builders and renovators should plan for further
increases in lumber prices both this year and next. China is
playing a major role in rising global demand for softwood
lumber. China’s lumber imports have continued to show
strong increases this year.
Post-earthquake reconstruction in Japan is expected to add to
lumber demand later this year. In addition, demand from the
U.S., which is the world’s largest lumber importer, already
shows a cyclical revival. Rising new home construction in
the U.S. will push all building supply prices higher.
The initial recovery in U.S. housing construction will be in
remodeling and repair and in multi-family construction.
Investors in distressed properties are remodeling abandoned
homes. Also, families who have defaulted and foreclosed are
now in the rental market. Increased demand for rental
accommodation is having an effect on rental unit remodeling
as well as on demand for new rental supply.

Andersen Economic Research Inc.

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