Category Archives: Finance & Economics

Finance & Economics

Canadian Housings Starts Rise 14% in February

By Canada Mortgage and Housing Corporation
Cision Newswire
March 15, 2024
Category: Finance & Economics
Region: Canada

OTTAWA, Ontario — The total monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada increased 14% in February (253,468 units) compared to January (223,176), according to Canada Mortgage and Housing Corporation (CMHC). The six-month trend in housing starts increased from 244,638 units in January to 245,665 units in February for a slight 0.4% gain. The trend measure is a six-month moving average of the SAAR of total housing starts for all areas in Canada. The actual number of housing starts across Canada in urban centres of 10,000 population and over was up 11% to 17,495 units in February compared to 15,822 units in February 2023. The year-over-year increase was driven solely by higher multi-unit starts, up 16%. Single-detached starts decreased 14% in February.

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Investors in the forestry space will be rewarded over the next 12 to 18 months: analyst

BNN Bloomberg
March 14, 2024
Category: Finance & Economics
Region: Canada, United States

Looking forward, we expect building materials share prices will increase alongside higher commodity prices, says Daryl Swetlishoff, head of research at Raymond James.

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The Impact of Finnish Labor Strikes on Its Pulp and Paper Industry

ResourceWise Forest Products Blog
March 12, 2024
Category: Finance & Economics
Region: Canada

On March 11, labor unions in Finland initiated a two-week strike that is poised to have a significant impact on the nation’s export and import sectors, particularly in freight and rail transportation. With a considerable portion of industries relying on rail transport for their raw materials, intermediary products, and final goods, the effects of this strike are expected to be swiftly felt. …SAK, the central organization of Finnish trade unions, has also reported possible repercussions for major industrial plants and distribution terminals due to the strikes. Given the escalating situation, the future appears to be a medley of uncertainty and tension. …For example, Stora Enso said the strikes could delay customer deliveries due to the impact on ports and railway transport. …UPM is currently shutting down operations at four of its mills – Kouvola, Rauma, Jämsänkoski, and the Kaukas pulp mill in Lappeenranta. …Metsä Group’s Metsä Fibre pulp mill in Joutseno, Lappeenranta, will be forced to cease operations.

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Paper packaging facility closures in February

By Maria Rachal
Manufacturing Dive
March 7, 2024
Category: Finance & Economics
Region: Canada, United States, International

Packaging manufacturers continue to tighten their manufacturing footprints as a result of changes to demand, restructuring plans and M&A deals. These were some of the announcements and disclosures in February:

  • Cascades announced it’s closing three containerboard facilities in Canada and the U.S.
  • Domtar is indefinitely curtailing operations at its mill in Ashdown, Arkansas.
  • Mohawk Fine Papers, certain assets of which were recently in Ohio in February. 
  • SEE disclosed WARN notice that it’s closing a site in Saddle Brook, New Jersey, impacting 83 . 
  • Sonoco announced permanent closures in Sumner, Washington, and Memphis, Tennessee.
  • Stora Enso expects to lay off up to 1,000 employees across all divisions.
  • Tetra Pak will shutter packaging material production operations in Singapore, impacting 300. 

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Canfor reports Q4, 2023 net loss of $117 million

By Canfor Corporation
Cision Newswire
March 5, 2024
Category: Finance & Economics
Region: Canada, United States

VANCOUVER, BC — Canfor Corporation reported its 2023 and fourth quarter of 2023 results. Highlights include: operating loss of $191 million; shareholder net loss of $117 million; Solid earnings for the Company’s European and US South operations in 2023, with persistent challenges in BC; Moderate uplift in global pulp market fundamentals through the fourth quarter; 20% improvement in pulp production quarter-over-quarter; Ongoing challenges with the availability of economically viable fibre impacting lumber and pulp operating rates in BC into 2024. Canfor CEO, Don Kayne, said, “It was an extremely challenging year for the Company as ongoing affordability constraints and high global lumber inventory levels put persistent pressure on lumber market conditions. …We are continuing to adjust our BC operating rates to manage through this challenging period and while, in the near-term. We continue to believe that longer term lumber market fundamentals remain positive.”

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Canfor Pulp Products reports Q4, 2023 net loss of $13 million

By Canfor Pulp Products Ltd.
Cision Newswire
March 5, 2024
Category: Finance & Economics
Region: Canada, United States

VANCOUVER, BC — Canfor Pulp Products reported its 2023 and fourth quarter of 2023 results: Highlights include: operating loss of $15 million; net loss of $13 million; 20% increase in pulp production in the fourth quarter reflecting improved operating performance at both the Northwood and Intercontinental NBSK pulp mills; Persistent challenges associated with the availability of economic fibre in BC. …Commenting on the Company’s 2023 and fourth quarter of 2023 results, CPPI’s CEO, Kevin Edgson, said, “We are pleased to see productivity improve this quarter following the maintenance downtime at the Northwood pulp mill. While market conditions showed some signs of recovery in the fourth quarter, demand uncertainty is anticipated, and we remain cautious in our market outlook. In addition, as the availability of economically viable fibre remains constrained, Management continues to focus on improving overall performance and preserving our balance sheet.”

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Bank of Canada holds benchmark rate steady at 5 per cent, reiterates risk to inflation outlook

By Alicja Siekierska
Yahoo Finance
March 6, 2024
Category: Finance & Economics
Region: Canada

The Bank of Canada held its benchmark interest rate at 5%, a move widely expected by economists even as the central bank makes progress on tamping down inflation. The decision marks the fifth consecutive time that the central bank has held its key rate at 5%. Inflation in January slowed more than economists expected, with prices rising 2.9% annually, within the Bank of Canada’s target range of between one and 3%. The central bank’s core measures of inflation also slowed in January, a sign that price pressures are easing. While progress has been made on slowing inflation, the central bank flagged in a statement released alongside its decision that “underlying inflationary pressures persist,” highlighting that measures of core inflation are still in the 3 to 3.5% range, and that the share of components in the CPI that are growing above 3% declined, but remains above the historical average.

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Canada says its housing deals with cities will build 750,000 homes in the next decade

Canadian Press in the Ottawa Citizen
March 4, 2024
Category: Finance & Economics
Region: Canada

Sean Fraser

OTTAWA — The Liberal government has finalized all of its deals with municipalities under the housing accelerator fund, a program it says has triggered Canada’s biggest-ever movement to increase residential density. Housing Minister Sean Fraser announced Monday the federal government has signed 179 housing deals via the $4-billion housing accelerator fund. The program has “led to the largest up-zoning movement in Canadian history,” a government news release said. Ottawa says the competitive process for funding resulted in 544 applications, but only one-third of them were successful. The agreements, which run until 2026-27, are expected to help fast-track 107,000 permits within the next three years and build more than 750,000 homes over the next ten years. …Experts often point out Canada’s housing shortage is caused in part by excessive red tape, slow permitting processes and high development fees at the municipal level.

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Lumber prices: What’s the latest?

By Feral McAlinden
Canadian Mortgage Professional Magazine
February 29, 2024
Category: Finance & Economics
Region: Canada, United States

Russ Taylor

Housing starts are off to a sluggish opening in Canada in 2024 – and their muted performance throughout last year weighed down on lumber production across North America. Ontario was the only region across North America up until October to increase production over the previous year in a “pretty rare” trend, according to wood market expert Russ Taylor, who said there’s little prospect of a big production uptick in the year ahead. …There’s little clarity at present over how economic trends will play out across Canada and in the US. …“There’s going to eventually be good news for housing starts, but it sounds like this year is going to probably be a mirror image of last year, maybe trending up towards the second half of the year on the production side. …Continuing low prices, meanwhile, mean BC mills are still struggling to turn a profit, according to Taylor.

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Lumber: Can Wood Prices Rally in Spring 2024?

By Andrew Hecht
Nasdaq.com
February 27, 2024
Category: Finance & Economics
Region: Canada, United States

Physical lumber futures have been making higher lows since early 2023. The three-year chart of nearby physical lumber futures shows the bullish price pattern since early last year when the price reached a $400 per 1,000 board feet bottom. The price reached its most recent $581 high in late January and was over the $560 level in late February as the spring approaches. Construction activity tends to increase after winter. …Lumber futures tend to peak in spring and early summer each year. …If pent-up demand in the housing market despite higher mortgage rates leads to more lumber demand, lumber futures, and the WOOD ETF could move higher over the coming weeks and months. …I believe the current environment limits lumber’s downside. At the same time, the price action over the past years suggests the upside could become explosive when the Fed finally cuts rates, increasing the addressable market for home buyers.

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Bank of Canada to cut interest rates in half by end of next year: Desjardins

By Noella Ovid
The Financial Post
February 24, 2024
Category: Finance & Economics
Region: Canada

Canadians can expect the Bank of Canada to start providing some respite this spring as the central bank “slowly but surely” moves towards its first interest rate cuts, says Desjardins Group. Desjardins is forecasting the first rate cut in June. …“We are seeing the damage caused by that very aggressive monetary policy,” Jimmy Jean said. …After the first cut, Desjardins expects the central bank will reduce rates by 25 basis points at every meeting this year and into 2025. …The Bank of Canada doesn’t have the same margin of error as the US Federal Reserve to keep rates higher for longer because “our economy is much more sensitive to interest rates,” said Jean. The U.S. economy had “a spectacular (year) in 2023, he said. …Canada’s economy, on the other hand, has already fallen into recession when viewed on a per-capita basis, said Jean.

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Conifex announces new credit agreement, reports negative earnings

Conifex Timber Inc.
March 7, 2024
Category: Finance & Economics
Region: Canada, Canada West

VANCOUVER, BC – Conifex Timber announced that it has completed a first amendment to credit agreement and accommodation agreement with Wells Fargo Capital Finance Corporation Canada… thereunder the Facility is secured by substantially all Conifex’s lumber business assets. …Benchmark SPF lumber prices declined 50% in 20231 which resulted in negative earnings in 2023 versus positive EBITDA of $46.7 milllion in 2022. As we progressed through 2023, our liquidity diminished, and accumulating losses made it increasingly difficult to comply with our fixed charge coverage ratio requirements under the Facility. On May 4, 2023, the Chief Forester in British Columbia permitted licensees in the Mackenzie Timber Supply Area to transition to a “green” log diet which enabled us to benefit from increased sawmill productivity, improved lumber grade outturns, and higher mill net sales price realizations. 

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Natural gas overtaking forestry as top contributor to B.C. government’s resource revenue

By Brent Jang
The Globe & Mail
March 6, 2024
Category: Finance & Economics
Region: Canada, Canada West

The natural gas industry is poised to take centre stage in BC’s economy and overtake the forestry sector as the largest contributor to the province’s resource revenue. The provincial government is counting on rising revenue from the royalties paid by producers of natural gas in northeastern B.C. to soften the blow of a stagnant forest industry. …In the current fiscal year, forestry revenue is expected to reach $691-million, while natural gas royalties should come in at about $684-million. …Linda Coady, COFI president, said the annual allowable cut has dropped 42% in recent years. …Forestry consultant David Elstone noted that the B.C. government’s budget released on Feb. 22 is forecasting that tree harvesting could flatten at 32 million cubic metres annually from the current fiscal year until 2026-27. Mr. Elstone said the province’s outlook for the annual allowable cut to become static “seems hard to believe” given the downward trend in harvest levels. [to access the full story a Globe & Mail subscription is required]

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GreenFirst Reports Financial Results for Fiscal 2023

GreenFirst Forest Products Inc.
March 14, 2024
Category: Finance & Economics
Region: Canada, Canada East

TORONTO, ON — GreenFirst Forest Products Inc. announced results for the fiscal year ended December 31, 2023. Fourth quarter 2023 net loss from continuing operations was $21.6 million or $0.12 per share, compared to net earnings of $2.7 million or earnings of $0.01 per share in the third quarter of 2023. For fiscal 2023, net loss from continuing operations was $48.8 million or $0.27 per share, compared to a net loss of $4.1 million or $0.02 per share in 2022 on the same basis. “Despite ongoing pricing pressures in the fourth quarter, we are starting to see some positive momentum in lumber markets at the beginning of 2024,” said Paul Rivett, GreenFirst’s Executive Chair. “This coupled with an enhanced operational focus with Joel Fournier as CEO are factors that bode well for GreenFirst’s resiliency in the current environment. On the paper side we expect productivity gains and a better cost profile with Terry Skiffington’s tenacious focus on operations, along with his many years of experience in this area.”

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Stella-Jones reports Q4, 2023 net income of $56M

Stella-Jones Inc.
February 29, 2024
Category: Finance & Economics
Region: Canada, Canada East

MONTREAL, Quebec – Stella-Jones announced financial results for its fourth quarter and year ended December 31, 2023. “We concluded 2023 with a marked improvement in profitability and the successful execution of investments to support the continued growth momentum in our infrastructure product categories,” said Eric Vachon, President and CEO. Q4 …Sales for the fourth quarter of 2023 amounted to $688 million, up 3% from sales of $665 million for the same period in 2022. Gross profit was $137 million in the fourth quarter of 2023 2022, representing a margin of 19.9% and 16.8%, respectively.  Similarly, operating income totalled $89 million in 2023 versus operating income of $61 million in the corresponding period of 2022, while EBITDA increased to $120 million, or a margin of 17.4%, compared to $87 million, or a margin of 13.1% reported in the fourth quarter of 2022.

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Goodfellow Inc. reports Q4, 2023 net earnings of $2.1M

February 29, 2024
Category: Finance & Economics
Region: Canada, Canada East

DELSON, Quebec — Goodfellow announced its financial results. For the fourth quarter ended November 30, 2023, the Company reported net earnings of $2.1 million or $0.25 per share compared to net earnings of $4.4 million or $0.52 per share a year ago. Consolidated sales for the three months ended November 30, 2023 were $125.4 million compared to $149.3 million last year. For the fiscal year ended November 30, 2023, the Company reported net earnings of $14.7 million or $1.72 per share compared to net earnings of $32.7 million or $3.82 per share a year ago. Consolidated sales for the fiscal year ended November 30, 2023 were $512.8 million compared to $631.2 million last year.

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Strong Rebound in US Single-Family Permits at the Start of 2024

By Danushka Nanayakkara-Skillington
NAHB – Eye on Housing
March 15, 2024
Category: Finance & Economics
Region: United States

Over the first month of 2024, the total number of single-family permits issued year-to-date nationwide reached 75,906. On a year-over-year (YoY) basis, this is an increase of 43.1% over the January 2023 level of 53,062. Year-to-date ending in January, single-family permits were up in all four regions. The range of permit increase spanned 67.0% in the West to 19.4% in the Northeast. The South was up by 39.4% and the Midwest was up by 36.5% in single-family permits during this time. For multifamily permits, the regions were split, with half posting increases and the other posting decreases. The Northeast was up by 64.5% and the Midwest was up by 13.6%. The South posted a decline of 32.5% and the West declined by 27.9% in multifamily permits during this time.

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US Producer Prices Up in February

By Jesse Wade
NAHB – Eye on Housing
March 14, 2024
Category: Finance & Economics
Region: United States

Inputs to residential construction, goods less food and energy, increased for the fourth consecutive month to a new high, according to the most recent Producer Price Index (PPI) report published by the U.S. Bureau of Labor Statistics. The index for inputs to residential construction, goods less food and energy, represents building materials used in residential construction. The non-seasonally adjusted index increased 0.49% between January and February after increasing 1.27% between December and January. …The seasonally adjusted PPI for softwood lumber fell for the seventh consecutive month, down 2.98% in February. Softwood lumber prices were 10.35% lower in February 2024 when compared to 2023. …The non-seasonally adjusted PPI for gypsum building materials jumped 2.95% in February after falling for ten straight months. …The seasonally adjusted PPI for ready-mix concrete rose 0.25% in February after rising 1.76% in January. …The non-seasonally adjusted PPI for steel mill products rose for the third straight month, up 2.86% in February.

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American Forest & Paper Association Sets Advocacy Agenda for 2024

The American Forest & Paper Association
March 12, 2024
Category: Finance & Economics
Region: United States

WASHINGTON — The American Forest & Paper Association (AF&PA) Board of Directors announced key advocacy priorities for 2024. …Howard Coker, AF&PA Board Chair and Sonoco President and CEO… “It is critical that both state and federal policies not jeopardize access to essential paper products or hinder countless modernization projects for our industry.” This year, several regulatory and policy challenges face both the paper and wood products industry and the U.S. manufacturing sector. “The growing regulatory burden, including recent EPA air regulations, are threatening U.S. manufacturing jobs and the economy. Meanwhile extended producer responsibility policies and the European Union’s Deforestation Regulation stand to impede our focus on a circular value chain,” said Heidi Brock, AF&PA President and CEO. Brock continued, “As a condition of membership, AF&PA members are committed to sustainable forest management and sourcing wood fiber from responsibly managed forests.”

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US Housing Continues to Keep Inflation Elevated

By Fan-Yu Kuo
NAHB – Eye on Housing
March 12, 2024
Category: Finance & Economics
Region: United States

Consumer prices in February saw another uptick, primarily fueled by the increases in shelter and gasoline prices, which contributed to over 60% of the total increase. Despite a slowdown in the year-over-year increase, shelter costs continue to put upward pressure on inflation, accounting for roughly two-thirds of the total increase in all items excluding food and energy. Given the ongoing elevated inflation, the Federal Reserve is expected to delay rate cuts until the second half of the year. …The index for shelter makes up more than 40% of the “core” CPI. The index saw a 0.4% rise in February, following an increase of 0.6% in January. The indexes for owners’ equivalent rent increased by 0.4% and rent of primary residence rose by 0.5% over the month. These gains have been the largest contributors to headline inflation in recent months.

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US Multifamily housing starts and permitting activity drop 10% year-over-year

By Quinn Purcell
Building Design + Construction
March 12, 2024
Category: Finance & Economics
Region: United States

The past year saw over 1.4 million new homes added to the national housing inventory. Despite the 4% growth in units compared to 2022, both the number of new homes under construction and the number of permits dropped year-over-year (YOY). Permitting for new housing has declined for the second year in a row—down 11% in 2023 according to the Housing Construction Report, a yearly analysis of housing trends by Point2. Similarly, the number of multifamily housing starts dropped 9% YOY. Overall, 70% of all U.S. metros saw a reduction in permitting last year. What does this mean for multifamily development in 2024? … Only a handful of metropolitan areas saw an increase in permitting in 2023. The three metros with the most permits issued were Phoenix, Ariz., and Houston and Dallas, Texas. Overall, the top three states—Texas, Florida, and California—make up more than one-third of all permits issued last year. 

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US inflation likely stayed elevated last month as Federal Reserve looks toward eventual rate cuts

By Christopher Rugaber
The Associated Press
March 11, 2024
Category: Finance & Economics
Region: United States

Jerome Powell

WASHINGTON — Consumer prices likely rose last month at a pace that would exceed the Federal Reserve’s inflation target, underscoring why the Fed is being cautious as it considers when to cut interest rates and suggesting that inflation will remain a potent issue in this year’s presidential election. Yet Tuesday’s report from the Labor Department may also show that underlying price pressures continue to ease, which would be an encouraging sign that inflation is gradually coming under control. Economists have estimated that prices rose at a brisk 0.4% annual pace from January to February, up from a 0.3% rise the previous month, according to estimates compiled by FactSet. Compared with a year earlier, inflation is expected to have remained 3.1% in February, unchanged from January. …Most economists expect the Fed’s first rate cut to occur in June, though May is also possible. 

Related coverage in Bloomberg: US CPI Won’t Inspire Fed to Cut Rates

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US Home-Selling Sentiment At Highest Level In Nearly Two Years

Fannie Mae
March 8, 2024
Category: Finance & Economics
Region: United States

WASHINGTON, DC – The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 2.1 points in February to 72.8, inching higher for the third consecutive month, due primarily to increased optimism around home-selling conditions. In February, 65% of consumers said it’s a good time to sell a home, up from 60% last month. The share of those who believe it’s a good time to buy a home ticked up slightly this month but remains at an extremely pessimistic 19%. Additionally, a plurality of consumers continues to believe that mortgage rates will go down over the next 12 months, although on net that component fell slightly this month. Overall, the full index is up 14.8 points year over year.

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Panelists at International Builders’ Show foresee multifamily starts decline in 2024

By Diana Mosher
Multi-housing News
March 5, 2024
Category: Finance & Economics
Region: United States

Multifamily starts are predicted to decline further in 2024, according to the National Association of Home Builders. In 2023, multifamily starts totaled 472,000 units—down 14 percent compared to the previous year. NAHB’s apartment experts are projecting that this year multifamily starts will fall 20 percent to a 379,000 total. …“Tight lending conditions and the high cost of development loans continue to hinder additional multifamily housing production,” said Nanayakkara-Skillington. …Construction prices have come down… However, the price of lumber will rise if anticipated Canadian lumber tariffs are implemented. “Lumber prices are going to go up—if we don’t increase domestic production—which is highly unlikely,” she explained. In addition to tight lending conditions and the high cost of development loans, multifamily faces a shortage of skilled labor.

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Single-Family Production Shows Signs of Stirring Across the US

By Jesse Wade
NAHB – Eye on Housing
March 5, 2024
Category: Finance & Economics
Region: United States

Led by larger urban metro markets, single-family growth rates are showing signs of a turnaround as moderating mortgage rates and a lack of existing inventory are contributing to a gradual upward trend, according to the latest findings from the NAHB Home Building Geography Index (HBGI) for the fourth quarter of 2023. The lowest single-family year-over-year growth rate in the fourth quarter of 2023 occurred in micro counties, which posted an 11.7% decline. …Nationally, from the Census Bureau’s monthly new residential construction survey, single-family permits for the three final months of the year (fourth quarter) were over 20% higher than the previous year’s level. The HBGI growth rates, which are based on a moving average of permit rates, began to rise as permit levels in the fourth quarter of 2023 increase by 24.8% nationally compared to the fourth quarter of 2022.

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US Single-Family Construction Spending Continues to Rise

By Na Zhao
NAHB – Eye on Housing
March 1, 2024
Category: Finance & Economics
Region: United States

NAHB analysis of Census data shows that private residential construction spending rose 0.2% in January 2024, the second month of gains in a row. It stood at a seasonally adjusted annual pace of $900.8 billion. The monthly increase in total construction spending is attributed to more single-family construction. Spending on single-family construction rose 0.6% in December. This is the ninth consecutive monthly increase since April 2023. It is aligned with the strong reading of 1.33 million single-family starts in January, as the lack of existing home inventory is boosting new construction. Compared to a year ago, spending on single-family construction is 12.5% higher. Multifamily construction spending went down 0.4% in January after an increase of 0.4% in December, as a large stock of multifamily housing is under construction. Private residential improvement spending inched down 0.1% in January and was 3.7% lower compared to a year ago.

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US Housing Supply Gap Widens in 2023, Multi-family Starts Slow

By Hannah Jones
Realtor.com
February 27, 2024
Category: Finance & Economics
Region: United States

In 2023, an additional 1.7 million households formed, resulting in a total of 17.2 million new households between 2012 and 2023. Homebuilders started construction on 947,200 single-family homes and 472,700 multi-family homes in 2023, bringing the 2012 to 2023 overall housing starts total to 14.7 million homes, roughly 10 million of which were single-family. As household formations outpaced housing starts in 2023, the gap between total housing starts and household formations widened from 2.3 million housing units between 2012 and 2022 to 2.5 million units at the end of 2023. The gap between single-family housing starts and household formations grew from 6.5 million at the end of 2022 to 7.2 million at the end of 2023 as household formations remained steady and single-family home construction waned. Though the gap widened, it was the third smallest single-year gap between households and housing starts since 2016. This trend of underbuilding relative to household formation carried over to homeowner vacancy rates as well as rental vacancy rates.

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Hardwood Lumber Exports: Dynamic Markets Critical to Sustaining the US Hardwood Industry

By Matthew Bumgardner
USDA Forest Service
February 29, 2024
Category: Finance & Economics
Region: United States

The U.S. hardwood industry has undergone substantial changes in recent years. The domestic furniture sector and consumption of hardwood lumber for construction have declined due to the Great Recession. However, exports have emerged as a vital cushion that is preventing a more extensive decrease in hardwood lumber production and mitigating economic impacts on the industry. …Hardwood lumber exports expanded by 2.5 million cubic meters between 1990 and 2017 and peaked at 4.5 million cubic meters in 2017. Despite a subsequent decline of 1.1 million cubic meters, exports in 2021 remained 73% higher than in 1990. …In the 1990s, Europe was a dominant export destination, but the 21st century brought a remarkable increase in the China/Hong Kong/Vietnam region’s importance as an export hub. By 2017, the CHV region had surged ahead and accounted for almost 65 percent of U.S. hardwood exports. This shifting landscape had implications for different hardwood species. 

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Real GDP increased at an annual rate of 3.2% in Q4, 2023

US Bureau of Economic Analysis
February 28, 2024
Category: Finance & Economics
Region: United States

Real gross domestic product increased at an annual rate of 3.2% in the fourth quarter of 2023, according to the “second” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9%. The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 3.3 percent. The update primarily reflected a downward revision to private inventory investment that was partly offset by upward revisions to state and local government spending and consumer spending.

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US Home Price Gains Continued in December

By Jing FU
NAHB – Eye on Housing
February 27, 2024
Category: Finance & Economics
Region: United States

National home prices continued to increase, hitting a new all-time high in December. Despite high mortgage rates, limited inventory and strong demand continued to push up home prices. Locally, six of 20 metro areas, experienced negative home price appreciation in December. The S&P CoreLogic Case-Shiller U.S. National Home Price Index (HPI), reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 2.4% in December, slower than a 3.0% increase in November. It marks the fourth straight month of deceleration since September. Nonetheless, national home prices are now 70% higher than their last peak during the housing boom in March 2006.

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US Consumer Confidence Retreated in February

The Conference Board
February 27, 2024
Category: Finance & Economics
Region: United States

The Conference Board Consumer Confidence Index® fell in February to 106.7 (1985=100), down from a revised 110.9 in January. February’s decline in the Index occurred after three consecutive months of gains. However, as January was revised downward from the preliminary reading of 114.8, the data now suggest that there was not a material breakout to the upside in confidence at the start of 2024. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell back to 147.2 (1985=100) in February from 154.9 in January. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—slipped to 79.8 (1985=100), down from a revised 81.5 in January. An Expectations Index reading below 80 often signals recession ahead. “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy,” said Dana Peterson, Chief Economist at The Conference Board.

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‘Continued strong demand’ driving recycled fiber market

By Colin Staub
Resource Recycling
February 27, 2024
Category: Finance & Economics
Region: United States

Major mill operators forecast a year of recovering demand in the containerboard market, translating to a greater need for the OCC and other fiber grades needed to supply those paper machines. In recent earnings reports and calls with investors, representatives from the largest publicly traded fiber companies in North America discussed their projections for the recycled fiber market. They also touched on investments to improve recycled fiber processing capacity, reported their latest recycling tonnages and more. …Packaging Corporation of America CEO Mark Kowlzan said the company is taking steps to “manage our expectations in the first half of 2024 for continued strong demand.” …During the company’s Jan. 25 earnings call, Bob Mundy, chief financial officer, noted the company anticipates higher recycled fiber prices will continue during the first quarter of 2024. Executives at International Paper agree.

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Wood pellet maker Enviva previews contract shakeup in bankruptcy

By Dietrich Knauth
Reuters
March 14, 2024
Category: Finance & Economics
Region: United States, US East

Bankrupt wood pellet manufacturer Enviva plans to renegotiate long-term biofuel supply agreements and resolve a $349 million contract dispute with German energy company RWE in bankruptcy, lawyers for the company said. David Meyer said that the company is building support for a deal that will cut $1 billion in debt and make its biofuel business more profitable in the long run. Those efforts will lead Enviva to terminate some contracts with customers who have “refused to engage” in price reductions, Meyer told U.S. Bankruptcy Judge Brian Kenney. …In addition to its contract renegotiations, Enviva is working to resolve a dispute with RWE, a German company that says it is owed $349 million. RWE’s attorney said that Enviva seems to be trying to wipe out the $349 million contract claim in exchange for a “minimal” equity stake in Enviva. RWE intends to scrutinize dividends that the company paid to shareholders before it went bankrupt.

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Enviva Announces Restructuring Plan to Reduct Debt by $1B

By Enviva Inc.
Businesswire
March 12, 2024
Category: Finance & Economics
Region: United States, US East

BETHESDA, Maryland — Enviva announced that it has entered into two Restructuring Support Agreements (RSAs): one RSA with an ad hoc group of holders representing approximately 72% of its senior secured credit facility… and a second RSA with certain holders representing more than 92% of bonds. …The RSAs are designed to support an expedited restructuring to reduce the Company’s debt by approximately $1.0 billion, as well as improve profitability. Enviva and certain of its subsidiaries have commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia. …Glenn Nunziata, Interim CEO said, “We look forward to emerging from this process better positioned to be a leader in the future growth of the wood-based biomass industry.” …The restructuring is targeted to be completed during the fourth quarter of 2024, and throughout the process, Enviva plans to continue constructing its Epes plant, with an in-service date expected to be during the first half of 2025.

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Enviva’s Stock Rises After Wood-Pellet Exporter Gets Another Week to Make Bond Payment

By Ryan Dezember
The Wall Street Journal
March 5, 2024
Category: Finance & Economics
Region: United States, US East

The flagging shares of America’s largest wood-pellet exporter got a lift Tuesday after Enviva said it had agreed to extend a forbearance agreement with creditors through March 11. The forbearance agreement that Enviva struck last month after missing a bond payment expired. Enviva’s shares, which reached nearly $90 in 2022, have traded for less than $1 this year. They rose by more than 30% today. Enviva is preparing to file for bankruptcy protection, the Wall Street Journal has reported. In addition to the forbearance extension, Enviva told investors in a securities filing that they should no longer rely on its financial reports for the first three quarters of 2023, which it said would be restated. [to access the full story a WSJ subscription is required]

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Rayonier Advanced Materials reports Q4, 2023 net loss of $102M

By Rayonier Advanced Materials Inc.
Business Wire
February 27, 2024
Category: Finance & Economics
Region: United States, US East

JACKSONVILLE, Florida — Rayonier Advanced Materials reported results for the fourth quarter and full year 2023. The Company reported a net loss of $102 million for the year ended December 31, 2023, compared to a net loss of $15 million for the prior year. …“Our EBITDA results for 2023 fell short of expectations reflecting soft demand for cellulose ethers products driven by weak construction activity, lower than expected demand in Paperboard and weak pricing in High-Yield Pulp and commodity pulp products,” said De Lyle Bloomquist, RYAM’s President and Chief Executive Officer. “As a result, we concluded the year with $139 million in Adjusted EBITDA and $53 million of free cash flow and remained in compliance with our original debt covenants with a net secured debt ratio of 4.2 times Adjusted EBITDA.

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Southern Pine exports of treated and untreated lumber rose 3% in 2023

Southern Forest Products Association
February 12, 2024
Category: Finance & Economics
Region: United States, US East

2023 Southern Pine exports of treated and untreated lumber ended 2023 up 3% over 2022 with 31.94 Mbf of exports despite being down 21.3% in December over November, according to December data from the USDA’s Foreign Agriculture Services’ Global Agricultural Trade System. December’s total was the lowest since the 30.95 Mbf exports in May 2020. Total softwood imports, meanwhile, were down 1.9% over the month and 2.5% over the year. …Mexico retained its status as the largest export market (by volume) of Southern Pine and treated lumber for the 10th month. Mexico ended 9% ahead of 2022 and imported 122.2 Mbf of Southern Pine so far this year. The Dominican Republic remains the No. 2 importer of Southern Pine, running 3% ahead over 2022 with77.5 Mbf. Jamacia follows as the No. 3 importer, up 30% with 55 Mbf. Exports to China cooled almost every month in 2023. …India’s imports ended up 312% on 31.2 Mbf. Shipments to the Caribbean leveled off after a post-COVID peak.

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Softwood imports for 2023 finished higher than the previous year

Specification OnLine UK
March 8, 2024
Category: Finance & Economics
Region: International

UK — Timber imports rallied in 2023 to finish just 2% down on the previous 12 months, according to the latest TDUK statistics. Despite the challenging end to 2023 seen across the construction sector, timber import volumes for the year were actually higher in three of the six product groups, with softwood imports in 2023 just outperforming the volumes seen in 2022 with growth of 0.8%. Overall, the volume of the main imported timber and panel products ended 2023 a little lower than in 2022, down by 2.2% on the previous 12 months. …After a slow start, softwood imports gained impetus in the second half, to end the year 1% higher. Hardwood, plywood, particleboard and engineered wood products imports were all lower in 2023, but OSB import volumes were significantly higher (up 19.4%) and MDF volumes, too, were 2.2% higher than in 2022.

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UK building and construction manufacturers on stronger footing for 2024

Builders Merchant News
March 5, 2024
Category: Finance & Economics
Region: International

UK — New analysis shows that building and construction manufacturers have rebounded from the supply chain challenges of 2022, with a jump in profitability. Mid-sized firms in the sector have benefitted from demand for products and stabilising supply chains, according to the latest Manufacturers’ Health Index, compiled quarterly by inventory management software brand Unleashed. The report reveals data on GMROI (gross margin return on inventory) – a measure of the profits made on inventory costs – across 16 manufacturing categories. Manufacturers were also surveyed to gain first-hand insights into the specific challenges and opportunities they face. Building and construction made an average of £2.51 for every pound invested in inventory, up from £1.80 in the previous quarter. 

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Chilean forestry giant Copec bounces back to profit in final quarter

By Sarah Morland
Reuters in Yahoo! Finance
February 29, 2024
Category: Finance & Economics
Region: International

SANTIAGO, Chile. — Chilean industrial conglomerate Empresas Copec leapt back into profit in the last three months of 2023 after a tough year marked by lower prices for its wood products and extreme weather hitting its forests. The company posted a net profit of $166 million, compared to a loss of $31 million the previous quarter and a loss of $9 million a year earlier. …Copec flagged higher costs linked to the start-up of its MAPA project, a major pulp mill expected to hit a capacity of 2.1 million tons per year. …The results come after Copec’s forestry arm, Arauco , was hit by floods, droughts and forest fires in 2023. …Arauco reported a quarterly loss of $84 million, narrower than the $177 million loss reported a year earlier. Over the year, Copec said, it suffered from a fall in pulp prices and higher fiber selling costs.

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