Wood Products Prices in The U.S. 

01-15th November 2010

Report from North America

 Federal Reserve to inject US$600 billion into economy
The US central bank, the Federal Reserve, announced that it would inject US$600 billion into government bonds by mid 2011. The recovery of the US economy remains very slow with high unemployment and low inflation. Consumer prices rose by just 1.1% over the last twelve months. The money injection is supposed to bring down long-term interest rates such as mortgages and other loans, increase lending and thereby economic growth.

Major exporting countries such as China and Germany criticized the move as it will make the US dollar cheaper and hurt exports to the US. Developing countries were also critical because a new flood of US dollars might increase the price of raw materials and commodities.

Unemployment remains high, more bank failures
The aftermath of the financial crisis and the housing market crash is still holding back the US economy. In October, the unemployment rate was at 9.6% for the third straight month. In the past, when manufacturing was a more important sector of the US economy, job creation used to bounce back faster after recessions. In today’s service economy and a higher degree of automation in manufacturing employers are slow to rehire.

US financial regulators have closed down 143 banks to date in 2010, compared with 140 in 2009. This year’s closures are on average smaller banks than in 2009. Among other reasons, it is the smaller banks that tend make risky commercial real estate loans. This year’s closures compares with 25 banks shut down in 2008, when the financial problems started, and just three banks in 2007. It is estimated that 160 to 200 banks will again close next year. The effect on lending has been small because larger banks have taken over the failed banks.

Furniture orders, shipments and retail improved slightly
Residential furniture orders and shipments improved only slightly according to the latest survey of manufacturers and distributors by consulting firm Smith Leonard. New orders for residential furniture increased 1% in August 2010 compared to the same month a year earlier. 58% of survey participants reported higher order rates compared with previous months.

Year-to-date furniture shipments were up 9% over August 2009. In 2009, shipments year-to-date were 20% below 2008. While in July shipments declined as usual in the summer, backlogs contributed to higher August shipments. Furniture inventories continued increasing, up by 14% over August last year.

After a brief increase in September, the Furniture Buying Index remained at the same level in October. After strong Labour Day weekend sales in early September, US consumers are still very cautious about spending money on big ticket items and are more likely than usual to wait for discounts. The Furniture Buying Index is compiled each month by America's Research Group from interviews with 5,000-8,000 consumers across the country.

Buy Canadian furniture campaign
The Quebec Furniture Manufacturers Association has launched a campaign to promote Canadian-made furniture to consumers. The campaign includes a website (qualitycanadianfurniture.ca) and product labelling. The initiative also promotes customised furniture and the ideas of buying local, green and quality products.

Contest promotes ipe decking
Advantage Trim & Lumber has launched the “Composite Deck Makeover” contest to raise awareness about quality problem with wood-plastic composite decking. The winner of the contest will receive free ipe decking to replace their current composite deck. Wood-plastic composites have taken significant market share from wooden decks in the US and Canada, replacing naturally resistant hardwoods and softwoods as well as treated softwoods.

Related News:

• Wood Market Prices in North America (16-31,Oct 2010)

• Wood Market Prices in North America (01-15,Oct 2010)

• Wood Market Prices in North America (16-30,Sep 2010)

Abbreviations

LM       Loyale Merchant, a grade of log parcel	Cu.m         Cubic Metre
QS        Qualite Superieure	Koku         0.278 Cu.m or 120BF
CI          Choix Industriel	FFR           French Franc
CE         Choix Economique	SQ              Sawmill Quality
CS         Choix Supplimentaire	SSQ            Select Sawmill Quality
FOB      Free-on-Board	FAS            Sawnwood Grade First and
KD        Kiln Dry	Second
AD        Air Dry	WBP           Water and Boil Proof
Boule    A Log Sawn Through and Through	MR              Moisture Resistant
the boards from one log are bundled	pc         per piece
together	ea                each
BB/CC  Grade B faced and Grade C backed	MBF           1000 Board Feet
Plywood	MDF           Medium Density Fibreboard
BF        Board Foot	F.CFA         CFA Franc
Sq.Ft     Square Foot	Price has moved up or down