U.S. sawmill production was unchanged in the third quarter according to the Federal Reserve G.17 Industrial Production report. Utilization rates for sawmills and wood preservation industries remained near 70% despite a weakened demand environment from lower levels of residential construction in the third quarter of 2025. The most notable lumber trend from the third quarter was the sharp drop for U.S. imports of softwood lumber, as higher duties went into effect.

Over the full year of 2025, the U.S. imported an estimated 12.7 billion board feet of softwood lumber, marking the lowest annual import level since 2014.

The sawmill utilization rate, a measure of actual production relative to potential full production published quarterly by the Census Bureau, has trended downward since 2017 due to added capacity and stagnant output. However, in the third quarter of 2025, on a four-quarter moving average, the utilization rate rose, as it increased from 68.2% to 68.8%. Meanwhile, sawmill production, based on a four-quarter moving average, was 1.2% higher in the third quarter of 2025 compared to the second quarter and was 3.1% higher than a year ago.

Lumber prices continued to decline in the third quarter. Softwood lumber prices fell 4.9% during the quarter, though they remained 3.9% higher than one year ago. Hardwood lumber prices continued to increase, rising 1.0% in the third quarter. This was the seventh consecutive quarter of price increases in hardwood lumber.

Employment in sawmill and wood preservation industries continued to fall, dropping to roughly 85,400 workers in the third quarter. This marked the tenth straight quarterly decline, bringing employment below the levels recorded at the onset of the pandemic. Notably, third‑quarter employment reached its lowest level since the first quarter of 2013.

U.S. softwood lumber imports faced rising duty rates throughout 2025. Canadian imports were affected the most, with the combined antidumping and countervailing duties doubling to 35%. Additionally, all softwood lumber imports became subject to a new 10% Section 232 duty, effective in October. As a result, softwood lumber imported from Canada, which accounts for around 80% of imports, now faces a 45% duty rate.

These higher duties contributed to import declines in the third and fourth quarters. The fourth quarter import volume was the lowest amount since the first quarter of 2014. Higher duties were not the only market headwind for imports, as residential construction demand faded over the course of 2025.

 
Source: eyeonhousing.org