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A new five-year outlook shows that supply and demand conditions in wood products for the long-awaited ‘super-cycle’ are now taking hold, with the full impact still some 3+ years away.

With the return of a demand-driven wood products market in 2012 – due to rapidly increasing housing starts in the U.S. – it is now forecast that lumber and panel prices will move to new highs in 2013 and record highs for lumber in 2014. A North American “super-cycle” has been predicted by Wood Markets since 2008 as a result of emerging supply-side constraints (mainly on forests and logs) as well as changing demand dynamics, but the global financial crisis that started in late 2008 and an unusually slow U.S. housing market recovery have delayed this event until 2012.

With the expectation of strong growth in U.S. housing starts over the next five years, combined with a better balance in the housing inventory and a recovering economy, the U.S. supply chain is expected to become overwhelmed at times during the next five years, allowing wood products prices to soar.

While there are a number of assumptions that are required to maintain steady economic growth, a strong wood products recovery amidst a tightening timber and mill supply base is still expected.

From The Forest Industry Network: http://forestindustry.com/feature-article/200/north-american-lumber-prices-forecast-soar-2013-and-reach-record-highs-2014