Pre-tax profits in Canada’s wood manufacturing industry are expected to grow from $1.1 billion in 2015 to just under $1.5 billion this year thanks to strong demand from the U.S., according to The Conference Board of Canada’s Wood Products Industry Outlook.

“With the weakness in the Canadian housing market weighing on the industry, the resurgence in the U.S. housing market is expected to remain the key driver for improving demand for Canadian wood products over the next couple of years,” said Michael Burt, Director, Industrial Economic Trends, The Conference of Canada. “The weakness in the Canadian dollar will also give Canadian wood exporters a competitive edge.”

Highlights include:

• Pre-tax profits in Canada’s wood products industry are projected to reach close to $1.5 billion in 2016, up from $1.1 billion in 2015.
• Strength in the U.S. housing market and the weaker Canadian dollar will continue to drive exports of Canadian wood products.
• Lack of investment in plants and equipment could limit the industry’s ability to take advantage of rising U.S. demand for wood products.

In 2015, U.S. housing starts posted double digit growth, climbing to 1.1 million units, the highest level since 2007. By 2020, U.S. housing starts are forecast to reach 1.9 million units. Given Canada is the largest supplier of wood products to the United States, accounting for just under half of all wood products imports in 2015, the strength in the U.S. housing market will continue to be a key driver of Canadian wood products exports. Industry exports are forecast to grow to $15.5 billion this year, a level not seen since 2006.

From CNW Newswire: