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Hardwood Lumbermen Aren’t As Upbeat

A survey conducted in Timber Processing in April 2019 revealed, not surprisingly, that confidence has declined among U.S. hardwood lumbermen compared to a similar survey a year ago. Over half of U.S. hardwood lumbermen (55%) are optimistic their business will be “good” or “excellent” in 2019 and into 2020, but it compares to 81% who responded likewise to the survey a year ago, representing a 26% decrease in confidence.

More specifically, 18% expect business to be excellent in 2019 and into 2020, compared to 29% in 2018, and 37% forecast their situation as good this year compared to 52% a year ago. Many of the lumbermen trickled down into the “fair” category at 40%, compared to 14% last year. Meanwhile, 5% of hardwood lumbermen see their business as poor or very poor this year, the same as last year.

Many respondents pointed to the trade situation with China, specifically the tariffs imposed on U.S. hardwood lumber by China as a huge concern. “Reduced Chinese demand has resulted in an over supplying of the remaining markets,” one lumberman commented.

A key part of the survey is how much new capital investment in machinery and systems their mills have committed to since the beginning of 2018: 14% have committed to at least $1 million in capital expenditure; 16% committed $500,000-$1 million, 8% $300,000 to $500,000, and 21% between $100,000 and $300,000. A long menu of equipment and technology items was provided in the survey for lumbermen to choose from. Forty-six percent checked maintenance as the primary focus of capital projects, followed by 33% investing in wheel loaders, trucking at 21%, lumber handling forklifts at 20%, log yard handling at 18% and conveyors at 16%. Coming in at 15% were log loaders, debarkers, data collection systems, dry kilns and controls.

One question asked what they are concerned about as to the efficiency of their sawmill operations. “Labor” came in as a major concern for many.

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