Category Archives: Finance & Economics

Finance & Economics

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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Controlling the boil: Altus Group’s Norman outlines ‘unsteady’ housing economy

By Don Procter
The Daily Commercial News
February 22, 2024
Category: Finance & Economics
Region: Canada

Peter Norman

Don’t expect a lot of new condominium highrise tower cranes to swing over the Greater Toronto Area in the next couple of years as the pipeline of projects dries up in the housing economy. That’s the word from Peter Norman, Altus Group’s vice-president, chief economist and the keynote speaker at the Light-Frame Wood Solutions Conference and trade show recently in Woodbridge, Ontario. While a “gradual” increase of single family housing starts is forecast in the next two years partly because of thawing interest rates, the highrise condo market is expected to be “sharply lower and will not recover in 2025,” he said. Norman called his speech Controlling the Boil because “there is a lot of stress in the outlook” resulting from the urgent need for housing at a time when the economy is “unsteady.” …It is not all dark and gloomy, however.

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Home Depot’s strong fourth quarter overshadowed by weakening sales and expectations for 2024

By Michelle Chapman
THe Associated Press
February 20, 2024
Category: Finance & Economics
Region: Canada, United States

Home Depot’s sales continued to fade during the fourth quarter as the country’s largest home improvement retailer feels the impact of high mortgage rates and inflation on its customers. While quarterly results topped Wall Street expectations, the company’s sales expectations for this year weighed on shares early. Shares slipped more than 2% before the opening bell Tuesday. Rival Lowe’s, which reports fourth-quarter earnings next week, fell more than 2%. Home Depot reported fourth-quarter sales of $34.79 billion, down from $35.83 in the prior-year period. …Sales at stores open at least a year, a key indicator of a retailer’s health, fell 3.5%. In the U.S., same store sales declined 4%. …A terrible climate for homebuyers is to blame, said Neil Saunders, managing director of GlobalData. …Home Depot predicts fiscal 2024 sales growth of about 1%, including the 53rd week. It anticipates same-store sales will be down about 1% for the 52-week period.

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Canadian new home prices decline slightly in January

Statistics Canada
February 21, 2024
Category: Finance & Economics
Region: Canada

Canadian new home prices decline slightly in January. The national index edged down 0.1% month over month in January. Prices were down or unchanged in 21 of the 27 census metropolitan areas (CMAs) surveyed. The largest month-over-month decrease in January was recorded in Ottawa (-0.4%). …Notable price decreases were also observed in Vancouver (-0.3%), Montréal (-0.3%) and Calgary (-0.2%). In January, the largest month-over-month increase in new home prices was seen in Edmonton (+0.8%) and Trois-Rivières (+0.4%). …Nationally, new home prices were down 0.7% year over year in January. This marked the 10th consecutive annual decrease recorded and the longest period of consecutive declines since 2009.

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China to be short on softwoods but heavy on hardwood supplies

By Russ Taylor Global and Margules Groome Consulting
Russ Taylor Global
February 22, 2024
Category: Finance & Economics
Region: Canada, International

We are excited to announce that this week marks the release of our China Outlook Report that addresses key softwood and hardwood topics, issues and outlooks. It includes novel analysis not previously conducted and is a timely must-have report. This new report, China Forest, Log & Lumber Report: Supply, Demand & Prices to 2030/2035, shows China will again become a significant growth market for softwoods – especially for lumber. The Chinese hardwood pulp sector will also see substantial growth with important fibre sourcing implications and opportunities. China’s softwood lumber demand peaked in 2019, a level unlikely to be reached for a very long time. Demand will increase slowly, but only by about 20% from 2023 to 2035. China’s hardwood eucalyptus plantation estate has expanded exponentially and based on size is now on par with Brazil. This expansion allows for more domestic supply than many would expect.

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‘A big positive shift’: What economists say about Canada’s inflation numbers

By Gigi Suhanic
The Financial Post
February 20, 2024
Category: Finance & Economics
Region: Canada

Canada’s inflation rate for January decelerated to 2.9 per cent, dropping more than economists were predicting and possibly opening a window for the Bank of Canada to start cutting rates as early as June. …The Bank of Canada will be pleased with January’s inflation report, and not just because the headline rate slowed more than expected, said Olivia Cross at Capital Economics. …Month-over-month core inflation rose 0.1 per cent excluding food and energy, slower than the 0.3 per cent gain in December. The Bank of Canada‘s preferred measures — CPI-trim and CPI-median — both slowed to 3.4 per cent and 3.3 per cent respectively, from 3.7 per cent and 3.5 per cent. …That is “well below” the Bank of Canada’s forecast of 3.2 per cent inflation in its most recent Monetary Policy Report. …“We still anticipate that interest rate cuts will start in June,” Grantham said.

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Taiga’s fourth quarter results impacted by low commodity prices

By Taiga Building Products Ltd.
Cision Newswire
February 23, 2024
Category: Finance & Economics
Region: Canada, Canada West

BURNABY, BC – Taiga Building Products Ltd. today reported its financial results for the year ended December 31, 2023. The Company’s consolidated net sales for the quarter ended December 31, 2023 were $367.7 million compared to $400.8 million over the same quarter last year.  A decrease in sales by $33.1 million. Gross margin for the quarter ended December 31, 2023 decreased to $42.4 million from $49.4 million over the same quarter last year. The decrease in gross margin was primarily due to lower commodity prices during the quarter. Net earnings for the quarter ended December 31, 2023 had a slight decreased to $9.4 million compared to $9.7 million over the same period last year primarily due to lower sales accompanied by an increase in operating costs. EBITDA for the quarter ended December 31, 2023 was $13.1 million compared to $17.2 million for the same period last year. EBITDA decreased primarily due to lower margins earned during the quarter.

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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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Cascades Reports Q4 net loss and full year 2023 results

By Cascades Inc.
Cision Newswire
February 22, 2024
Category: Finance & Economics
Region: Canada, Canada East

KINGSEY FALLS, QC, – Cascades reports its unaudited financial results for the three-month period and fiscal year ended December 31, 2023. 2023 Annual highlights: Sales of $4,638 million (compared with $4,466 million in 2022); Operating income of $40 million (compared with $33 million in 2022); Net loss per common share of ($0.76) (compared with ($0.34) in 2022); Adjusted net earnings per common share1 of $1.08 (compared with $0.37 in 2022). …Discussing results for the fiscal year 2023, Mario Plourde, President and CEO, commented: “We are pleased with our strong annual performance in 2023, with our operations generating a 4% increase in sales and a 48% increase in EBITDA (A)1 levels compared to the prior year. Our Tissue Papers segment drove these stronger results, generating $182 million of EBITDA (A)1 in 2023, a significant improvement from last year that reflects the hard work done over the past two years.”

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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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US New Home Sales Up at the Start of 2024

By Danushka Nanayakkara-Skillington
NAHB – Eye on Housing
February 26, 2024
Category: Finance & Economics
Region: United States

Stable mortgage rates at the beginning of 2024 helped new home sales to increase in January. Sales of newly built, single-family homes in January increased 1.5% to a 661,000 seasonally adjusted annual rate from a downwardly revised reading in December, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in January is up 1.8% from a year earlier. …New single-family home inventory in January remained elevated at a level of 456,000, up 3.9% compared to a year earlier. This represents an 8.3 months’ supply at the current building pace. A measure near a six months’ supply is considered balanced. …The median new home sale price in January was $420,700, up 1.8% from December, but down 2.6% compared to a year ago. In terms of affordability, the share of entry-level homes priced below $300,000 has been steadily falling in recent years. 

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Fannie Mae predicts a soft landing for the US economy

By Michael Rudy
Yield Pro
February 26, 2024
Category: Finance & Economics
Region: United States

Fannie Mae’s February economic forecast calls for a steady decline in inflation while both GDP growth and employment growth remain positive, if subdued. The housing forecast predicts that multifamily starts will be higher in 2024 but lower in 2025 than they predicted last month. …The largest modification from last month’s forecast was a call for 29,000 (annualized) additional multifamily starts in Q2 2024. …Fannie Mae’s forecasters are predicting that the Federal Reserve will cut the Fed Funds rate by a total of 70 basis points in 2024 and by another 70 basis points in 2025, ending 2025 at a rate of 3.7 percent. …Fannie Mae now expects single-family starts to be 1,014,000 units in 2024, up 25,000 units from the level forecast last month. Single-family starts in 2025 are forecast to be 1,053,000 units, up 7,000 units from the level forecast last month. The Fannie Mae February forecast can be found here.

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US Builders Reporting Labor Shortages Ease, But Remain Worse Than in the Last Boom

By Paul Emrath
NAHB – Eye on Housing
February 23, 2024
Category: Finance & Economics
Region: United States

With home building volumes lower, labor shortages have eased considerably since record levels set in 2021 but remain relatively widespread in a historic context, according to results from the latest NAHB/Well Fargo Housing Market Index (HMI) survey. The February 2024 HMI survey asked builders about shortages in 16 specific trades. The percentage of builders reporting a shortage (either some or serious) of labor they employ directly ranged from a low of 33% for landscape workers to a high of 65% for those performing finished carpentry. The finished carpentry shortage was down from 72% in 2023 and an all-time high of 85% in 2021. …The February 2024 HMI survey also collected information about shortages of subcontractors. The percentage of builders reporting a shortage of subcontractors ranged from 35% for building maintenance managers to 63% for finished carpenters.

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US Multifamily Developer Confidence in Negative Territory in Q4

By Eric Lynch
NAHB – Eye on Housing
February 22, 2024
Category: Finance & Economics
Region: United States

Confidence in the market for new multifamily housing was in negative territory for the fourth quarter, according to results from the Multifamily Market Survey (MMS) released today by the National Association of Home Builders (NAHB). The MMS produces two separate indices. The Multifamily Production Index (MPI) had a reading of 41 – below the break-even point of 50 – while the Multifamily Occupancy Index (MOI) reading was 77. Financing new multifamily projects continues to be difficult due to tight lending standards and the high cost of development loans. Given that, along with the historically high level of supply for multifamily units under construction, NAHB forecasts a major pullback in multifamily starts for 2024.

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Australia’s demand for American hardwood goes up a gear

Architecture and Design Australia
February 23, 2024
Category: Finance & Economics
Region: United States, International

Export figures released by the American Hardwood Export Council indicate a soaring demand for American Red Oak across Australia, as US hardwood lumber exports increased by 22 percent between Australia and the US in 2023, valued at $32 million. That sum equates to approximately 9,000 cubic metres of Red Oak, America’s number one hardwood species. Readily available, and of a consistently high quality, red oak has similar characteristics to white oak in terms of strength and stability, but an open grain is more suitable for staining. …In addition to Red Oak, there has been demand for the likes of American Cherry and Maple, which have seen volume increase by 650 percent and 110 percent respectively. “Australia and New Zealand remain important markets for us,” says Rod Wiles, Regional Director for the American Hardwood Export Council. 

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US Multifamily Missing Middle Construction Unchanged

By Robert Dietz
NAHB – Eye on Housing
February 23, 2024
Category: Finance & Economics
Region: United States

The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties. The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has disappointed since the Great Recession. For the fourth quarter of 2023, there were just 4,000 2- to 4-unit housing unit construction starts. This is flat from a year prior. As a share of all multifamily production, 2- to 4-unit development was just above 4% of the total for the fourth quarter. In contrast, from 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction. Construction of the missing middle has clearly lagged during the post-Great Recession period and will continue to do so without zoning reform focused on light-touch density.

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US Housing Activity Expected to Pick Up in 2024 as Rates Move Lower

Fannie Mae in the Financial Times
February 23, 2024
Category: Finance & Economics
Region: United States

WASHINGTON — Existing home sales and new single-family housing starts are expected to grow modestly in 2024 amid lower mortgage rates and slowly strengthening homebuyer sentiment, according to the February 2024 commentary from the Fannie Mae Economic and Strategic Research (ESR) Group. While housing affordability is still seriously constrained following the home price run-up of the past few years, the supply of existing homes available for sale is finally showing signs of loosening. Additionally, more households have recently signaled that they expect mortgage rates to decline. …The ESR Group’s latest forecast sees mortgage rates falling to 5.9 percent by the end of 2024 and 5.7 percent by the end of 2025, both slight upticks compared to last month’s forecast. Additionally, it expects single-family starts to trend upward in 2024 despite the pullback this past month, as permits have increased for twelve consecutive months and demand for new homes remains robust.

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US New Single-Family Home Size Moves Lower

By Robert Dietz
NAHB – Eye on Housing
February 21, 2024
Category: Finance & Economics
Region: United States

An expected impact of the virus crisis was a need for more residential space, as people use homes for more purposes including work. Home size correspondingly increased in 2021 as interest rates reached historic lows. However, as interest rates increased in 2022 and 2023, and housing affordability worsened, the demand for home size has trended lower. According to fourth quarter 2023 data from the Census Quarterly Starts and Completions by Purpose and Design and NAHB analysis, median single-family square floor area came in at 2,156 square feet, the lowest reading since the beginning of 2010. Average (mean) square footage for new single-family homes registered at 2,374 square feet.

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AF&PA Releases January 2024 Packaging Papers and Printing-Writing Monthly Reports

The American Forest & Paper Association
February 16, 2024
Category: Finance & Economics
Region: United States

WASHINGTON – The American Forest & Paper Association (AF&PA) released its January 2024 Packaging Papers Monthly report. Total packaging papers & specialty packaging shipments in January decreased 4% compared to January 2023. The operating rate for bleached packaging papers was 86.0%, up 11.3 points from January 2023. Shipments of the biggest subgrade in unbleached packaging papers – bag & sack – were 92,900 short tons for the month of January, down 1.1% from the same month last year. …AF&PA also released the January 2024 Printing-Writing Monthly report. Total printing-writing paper shipments decreased 9% in January compared to January 2023. U.S. purchases of total printing-writing papers decreased 19% in December 2023 compared to the same month in 2022. Total printing-writing paper inventory levels decreased 1% when compared to December 2023. Compared to the same period last year—Uncoated Free Sheet shipments decreased 3%, Coated Free Sheet shipments decreased 12%, and Mechanical papers shipments decreased 35%.

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Declines for Custom Home Building

By Robert Dietz
NAHB – Eye on Housing
February 20, 2024
Category: Finance & Economics
Region: United States

NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates a slowing market for custom home building after a recent gain in market share. There were 44,000 total custom building starts during the fourth quarter of 2023. This marks a more than 2% decline compared to the fourth quarter of 2022, consistent with weakness experienced throughout the home building sector. Over the last four quarters, custom housing starts totaled 178,000 homes, a nearly 13% decline compared to the prior four quarter total (204,000). …As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, has fallen back to just under 19%. This is down from a prior cycle peak of 31.5% set during the second quarter of 2009.

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Residential Building Material Price Increase to Start 2024

By Jesse Wade
NAHB – Eye on Housing
February 16, 2024
Category: Finance & Economics
Region: United States

The latest Producer Price Index, reported by U.S. Bureau of Labor Statistics, indicated that inputs to residential construction, goods less foods and energy (not seasonally adjusted) increased 1.28% between December 2023 and January 2024. This was the largest monthly change for the index since March of 2022, when it increased by 2.07%. The year-over-year change of the index was 1.91%, the largest yearly increase since February of 2023. …The seasonally adjusted PPI for softwood lumber continued to fall as it decreased for the 6th consecutive month, down 1.82% in January. Over the past year, softwood lumber prices have been down 8.98%. …The not seasonally adjusted PPI for gypsum building materials did not change over the month of January, but was 1.92% lower than last year. …Ready-mix concrete seasonally adjusted prices increased in January 1.37% after falling 1.27% in December. …The not seasonally adjusted PPI for steel mill products continued to rise for the second straight month, up 5.4% in January. 

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Boise Cascade reports positive Q4, 2023 results

By Boise Cascade Company
Businesswire
February 20, 2024
Category: Finance & Economics
Region: United States, US West

BOISE, Idaho — Boise Cascade reported fourth quarter net income of $97.5 million, or $2.44 per share, on sales of $1.6 billion. For the full year 2023, Boise Cascade reported net income of $483.7 million, or $12.12 per share, on sales of $6.8 billion. “We closed out 2023 with a fourth quarter that delivered strong financial performance, further execution of our growth strategies through organic and acquisition initiatives, and meaningful returns to our shareholders through share price gains and dividends,” stated Nate Jorgensen, CEO. “As we look forward to 2024, we are optimistic about new single-family residential construction activity and have great confidence in our people to execute our strategy independent of the market backdrop.”

In the Financial Times: Mike Brown, Executive VP of Wood Products, will retire effective May 3, 2024. Troy Little is his successor.

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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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BlueLinx Announces Q4 and Full Year 2023 Results

By Bluelinx Holdings Inc.
Yahoo Finance
February 20, 2024
Category: Finance & Economics
Region: United States, US East

ATLANTA — BlueLinx, a U.S. wholesale distributor of building products, reported financial results for the three months and twelve months ended December 30, 2023. Highlights include: Net sales of $713 million; Gross profit of $118 million, gross margin of 16.6% and specialty gross margin of 19.4%; Net loss of $18 million, primarily due to the exit of a defined benefit pension plan resulting in a one-time $30.4 million charge plus related income taxes; Adjusted net income of $26 million; and Adjusted EBITDA of $36 million, or 5.1% of net sales. …Shyam Reddy, President, and CEO of BlueLinx… “Specialty products continued its strong margin performance and accounted for 70% of net sales and 80% of gross profit for the year.”

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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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Paper and Board sector impacted by lower level of demand in Europe, destocking and high production costs

Confederation of European Paper Industries (Cepi)
February 13, 2024
Category: Finance & Economics
Region: International

EUROPE — Suffering from an adverse macro-economic context, production of pulp and paper in Europe has experienced a decline in 2023. It was due to several compounding external factors: a poor economic environment, destocking and still high energy costs, as shown by the Cepi preliminary statistics report. With mid-term global economic trends impacting the demand for paper and board and exacerbating destocking, consumption fell by 15.3% in 2023 and, in turn, production in the paper and board industry suffered a second consecutive year of contraction, decreasing by 12.8%. After a year 2022 marked by sky high energy prices, the decrease in production in 2023 continues to be more pronounced even than it was during the Covid-19 crisis (-4.7% in 2020). …These global trends have been worsened by the comparative high costs in Europe for production inputs, and notably energy, which cost continues to be unsustainably high.

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