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Surging Demand Spurs Sawmill Owners to Increase Production Capacity

by Freedonia Industry Studies

May 19, 2021

As noted frequently on this site, lumber demand has risen sharply during the pandemic, fueled by strong growth in new housing starts and increases in home improvement and repair activity, particularly among DIYers. Lumber prices have climbed to record heights as home builders, contractors, and homeowners have scrambled to obtain materials for a wide range of products. This shortage of lumber – and its high price – is a threat to the US economy as it climbs out of the pandemic, as delayed or canceled projects threaten thousands of construction-related jobs across the US.

Thus, it was welcome news when two leading North American lumber suppliers announced plans to expand production capacity at sites across the US.

  • Interfor announced plans to expand production capacity a sawmill in Perry, Georgia
  • West Fraser Timber announce plans to expand lumber production at five sawmills in the South (as well as two US OSB mills)

These planned capacity expansions will provide much needed relief to the US lumber market, expanding supplies and hopefully directing prices to historically more normal levels. Furthermore, as these mills ramp up lumber production, demand for the timber needed to make lumber will rise. This will in turn stimulate logging activity, which has remained sluggish due to low prices.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly in the Construction and Building Products and Consumer Goods areas. Freedonia also offers an expanding catalog of COVID-19 Economic Impact reports, which highlight how various industries are responding to the current crisis with a comparison to recent recessions. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

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