b'24American Journal ofTransportation ajot.comForest products trade trends FOREST PRODUCTS 2024By George Lauriat, AJOTh omeboDye conomIcs induced recession. However, like IntheUS,forestproducta magna pool of a volcano wait-supplyanddemandforecastsing to erupt, there is an unreal-beginathomeormorecor- ized demand sitting just beneath rectly with housing starts. Andthe surface of the US economy. housing prices are a kick starterAndifconditionsarerightin for housing starts. Coming out2025, demand for forest products of COVID in 2020, New Resi- could overflow current expecta-dentialConstructiontookofftions. As the United Nations Eco-and remained high before mod- nomicCommissionforEurope eratingin2022.Inthelatest(UNECE)succinctlyexpressed data (July) building permits andthelumbersupplyanddemand starts are trending downward, assituationintheUS,housing arehousingcompletionsalbeitunitshavenotkeptpacewith at a higher rate than either startspopulation growth. or permits.However,therearesev-Home Depots monthly news- eral other non-domestic factors letterTheForecastintheirthatinfluencethesupplyand August issue put some contextdemand equation and could tap for the sluggish performance indown this bubbling resurgence.the recent housing market, stat-ingthatmedianexistinghomea v eryc rossb orDera ffaIrprices had climbed to a recordInmostrespects,therela-high, 6% more than 2023, whiletionship between Canada and the existing home sales had dropped(TRENDScontinued on forthreestraightmonthsduepage 26) Aerial view of massive lumber capacity in British Columbia.Dreamstime photo.toelevatedprices,mortgage rates and insurance rates. The newsletteralsoobservedhigh mortgage rates have caused theBALTIM O RElock-ineffecttocontinuefor long-timehomeowners.People withhomespurchasedunder lowinterestratesarereluctant tomovetonewhousesunder higher rates. They stay in place, reducing the number of homes on the market. And the stay in place mentality has in turn low-ereddemandfornewhomes, and the lumber to build them. ForestEconomicAdvi-sors (FEA) in the April 2024 Forest Products Outlook sug-gested that there is an underly-ingdemandformorehousing startsbutthatrealizationwas constrained by a combination of interest rates, rising inflation fearsandthecostandavail-ability of labor in an economy witha4.2%unemployment rate.TheFEApointsoutthat the US housing stock has aged as 49% of the US owner-occu-piedhomeswerebuiltbefore 1980;only9.4%werebuilt between 2010 and 2021. TheBACKagedhousingstockalsosup- IS ports the notion that there is an underlying demand for housing and thus lumber. For these rea-sons and others, the FEA was forecastinglumberconsump-tion will see moderate growth in 2024 and more robust growth in 2025.TheFEAforecastislook-ingsolidastheUSeconomy overthelasttwoyearshas outperformedthepredictionsOutstanding Facilities and Top-Quality Warehousingofmanyeconomistslargely duetoconsumerscontinuing tospend.NationalRetailFed- On-Dock Rail with Two Class 1 Railroadseration (NRF) Chief Economist JackKleinhenzrecentlysaid,Closest East Coast Port to the MidwestTheU.S.economyisclearly not in a recession nor is it likely to head into a recession in theOperational Efficiencies and Damage-Free Handling home stretch of 2024. Adding, Instead,itappearsthatthe economy is on the cusp of nail- Less Than Two Miles to Interstate 95ing a long-awaited soft landing with a simultaneous cooling ofAccess to 2/3 of the U.S. Population Within 24 Hoursgrowth and inflation.What does this all mean for lumber demand in the US? It isThe Premier Port for Forest Productslikelyin2025thedemandfor forest products will again moveMarylandports.com 1.800.638.7519upward, although not at the same pace as the industry experiencedGovernor Wes Moore MDOT Secretary Paul J. Wiedefeld Executive DirectorJonathan Danielswhile emerging from the COVID'