Economy Today for Value Added Wood Manufacturing

Transcription

1 Economy Today for Value Added Wood Manufacturing November 2011 Phil Mitchell, Associate Professor Department of Forest Biomaterials North Carolina State University

2 Main Economic Drivers A Brief Summary

3 Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Unemployment (%) Unemployment Rate Source:

4 Consumer Confidence Index Source: NY Times.

5 1000 Units New Privately Owned Housing Units Started 650 Seasonally Adjusted Annual Rate J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S Source: US Census Bureau.

6 Existing Home Sales (1000s) New Home Sales (1000s) 6500 New & Existing Home Sales Seasonally Adjusted Annual Rate S O N D J F M A M J J A S O N D J F M A M J J A S Existing Home Sales New Home Sales 200 Sources: US Census Bureau. National Association of Realtors

7 Housing Supply in months Source: NY Times.

8 Points to Note Unemployment has been stuck above 9% since May Some suggest the real unemployment is 16.6% (includes part time and marginally attached). Consumer confidence is a problem as consumers are worried about the economy and their jobs. Annual rate of single family Housing Starts has been below 450,000 since May New and Existing Home Sales have remained mostly flat during Housing supply remains high as foreclosures & distress sales continue. Consumer spending is 70% of economy, so news that spending rose 0.6% in September was good.

9 Hardwood Lumber Production

10 UNECE-TOTAL UNECE-TOTAL Hardwood Lumber Production & Consumption in UNECE Region ( ) Production (Million BF) UNECE region consists of 56 countries in the EU, CIS, North America U.S. Europe CIS Canada UNECE -Total ,000 Apparent Consumption (Million BF) 20,000 15,000 10,000 5,000 U.S. Europe CIS Canada UNECE Total Source: UNECE/FAO Forest Products Annual Market Review,

11 Total Lumber (billions of bd. ft.) Lumber Products (billions bd. ft.) Hardwood Production Pallet/Crating Furniture Exports Cabinets 5.0 Miscellaneous 4.5 Railroads Flooring 4.0 Dim/Mill/Mldg Total Year 0.0 Source: Joe Denig, NC State

12 US Hardwood Lumber Consumption Source: UNECE/FAO Forest Products Annual Market Review,

13 Billion Board Feet % of Grade Exported US Hardwood Lumber Trends Estimated U.S. Hardwood Lumber Production 40.0% 35.0% 30.0% % % % 10.0% 5.0% % Total Production Grade Lumber Production Low-grade Lumber Production % of Grade Exported Source: Hardwood Review Weekly, Sept. 2, 2011

14 Chinese Imports of Hardwood Lumber Source: UNECE/FAO Forest Products Annual Market Review,

15 Consumer Confidence Index Source: William Luppold, USDA Forest Service, Princeton, WV

16 Source: William Luppold, USDA Forest Service, Princeton, WV

17 Source: William Luppold, USDA Forest Service, Princeton, WV

18 Source: William Luppold, USDA Forest Service, Princeton, WV

19 Source: William Luppold, USDA Forest Service, Princeton, WV

20 Points to Note US Hardwood lumber production has decreased by 1/3 from 2006 to According to Luppold, much of the hardwood production capacity has been permanently lost. Lumber for pallets and export have remained relatively strong. The volume of US hardwood lumber for furniture in 2010 is about 10% that consumed in In 2010 about 35% of hardwood grade lumber was exported. China grew more dependent on sawn hardwood lumber in 2010 & 2011, with the projection that about 20% of their imported hardwood will be from the US this year.

21 Wood Products

22 Value of Shipments for Industry Segments (Millions $) Value of Shipments (Millions $) 25,000 Value of US Shipments Furniture and Related Products 90,000 80,000 20,000 70,000 15,000 10,000 5,000 60,000 50,000 40,000 30,000 20,000 Wood Kitchen Cabinets Upholstered HH Furniture Nonupholstered Wood HH Furniture Household Furniture, nec Institutional Furniture Wood TV, Radio, Phono, Sew Cab. Wood Office Furniture Custom Woodwork, Millwork Showcases, partitions, shelving Value of Shipments 10, Source: International Trade Association

23 Import Market Share Source: Buehlmann & Schuler, For. Prod.J.

24 Points to Note From the year 2000 to 2008, the value shipped of nonupholstered household furniture Made in the USA has dropped by 45%. Over the same period, the value shipped of wood kitchen cabinets and institutional furniture have increased 34%. During this time frame, the value of shipments for Custom Woodwork & Millwork has increased 150%. Over this time, the percent share of imported nonupholstered wood household furniture increased from 39 to 64%.

25 Value of US Shipments Furniture and Related Products 2000 Wood Kitchen Cabinets 5% 15% 21% Upholstered HH Furniture 1% 8% 9% 22% 18% Nonupholstered Wood HH Furniture Household Furniture, nec 1% Institutional Furniture Wood TV, Radio, Phono, Sew Cab Wood Kitchen Cabinets 5% 1% 12% 11% 1% 13% 12% 27% 17% Upholstered HH Furniture Nonupholstered Wood HH Furniture Household Furniture, nec Institutional Furniture Wood TV, Radio, Phono, Sew Cab. Source: International Trade Association

26 Component Market Trends Cabinetry 16% 25% 31% 33% Building Products 10% 46% 28% 32% Furniture 65% 19% 21% 21% Industrial Products Decorative/ Specialty 5% 3% 7% 5% 4% 7% 13% 8% Source: Wood Component Manufacturers Association Market Studies. Building products trim, mouldings, millwork, staircase parts, etc. Decorative/Specialty musical instruments, caskets, toys, sporting goods, picture frames, etc. Source: Woodworking Network

27 Remodeling Source: A New Decade of Growth for Remodeling Joint Center for Housing Studies of Harvard University

28 Points to Note Falling home prices, high unemployment, reduced home equity loans, and record foreclosures have discouraged homeowners from making improvements. Even so, in 2009 the remodeling market was $286 billion, down from $326 billion in However, typically during downturns the home improvement share of total residential investment increases. Hence in 2005 home improvement or remodeling accounted for about 40% of residential investment, whereas in 2009 it was 67%.