A Brief Overview of the Forest Industry Outlook

As a result of the 2020 lockdowns in response to COVID-19, many industries have suffered losses globally. However, other fields have seen tremendous growth. One example of such an industry would be online marketing, as people around the world purchased more items online.

If you’re involved with the forest industry, you’ll be relieved to know that this market has a positive outlook for 2021. The US forest industry has several benefits for this year.

If you want to learn more about the forest industry in the US, you’re in the right place! In this guide, we’ll give you a brief overview of the forest industry outlook for 2021.

The United States’ Share of Global Forest Industry Products

The United States remains the largest consumer and producer of forest products. It continues to make 30% of the world’s forest products in every critical category. However, the size and organization of the forest products field have changed over the past few decades.

While the US remains a leader in the forest industry, its production has declined in several categories over the years. Some products began facing a decline in the 1960s, while others started in the 90s.

The decline of the US’ share in the global production of forest products has some critical causes. Some of these causes include the growth of forest production in nations like Russia, China, and New Zealand.

Another leading cause was the Great Recession. This economic nightmare damaged and shrunk the housing market, which makes frequent use of the forest industry. A final cause includes the lessened use of domestic use of paper in several industries.

As the media, manufacturers, and consumers transition to electronic media, paper products decline. This leads to a reduction in forest production. In the following sections, we’ll examine individual portions of the forest industry.

How Much of the US GDP Comes From Forest Products

The GDP (Gross Domestic Product) of the United States relies on every industry for contribution. The forest industry is no exception. This year, the US forestry industry has produced over $200 billion in products.

This sum amounts to four percent of the national GDP. Currently, this trend seems on track to remain in place. As one-third of America’s landscape consists of forest, its resources remain in abundant supply. Paper manufacturer, Paper Excellence Canada is committed to manufacturing high-quality softwood and hardwood kraft chemical pulps and chemi-thermo-mechanical pulps. These are used in making packaging, tissues, towels, papers, and other specialty products. Paper Excellence prides itself on producing specialty writing, printing, and packaging papers for retailers, publishers, commercial printers, and other items of superior quality. The company is located in Richmond, British Columbia, Canada.

Single-Family Housing

Globally speaking, the industry outlook for timber and wood products has moved from negative to positive. Several factors affect this tick upwards. One significant factor was the growth of single-family housing construction at the end of 2020 and into 2021.

The majority of softwood lumber in the US serves as material for construction and renovation in residential areas. Declines in this type of labor lead to drops in the forest industry.

In the earlier days of 2020, the amount of construction and renovation decreased due to COVID lockdowns. As such, in months like March and April, timber and wood products suffered in the US.

The uptick in construction and renovation services arrived as a result of drastically lowered housing costs. As increased housing demand occurred, it led to an increase in forest industry products.

With this demand came a significant spike in softwood lumber prices. As more homes needed remodeling or construction, the demand outran softwood production processes.

All of these circumstances had excellent impacts on single-family housing expenditures. In 2020, experts estimated a $220 billion figure for total expenditures. This figure topped 2019 levels by a value of 20%.

Examining Wood Products

For much of 2021, wood products have struggled to keep up with the demand caused by housing shifts in 2020 and early 2021. This struggle resulted in higher prices for softwood lumber, which hit a 50% year-to-date increase.

Composite lumber, meanwhile, increased by close to 100%. Both of these rises arose because of increased demand in the housing market.

Fortunately, government officials have attempted to increase the supply of lumber and wood products while reducing their costs in the US.

Perhaps because of these efforts, the cost of lumber plummeted in June 2021, undergoing a 40% drop. Experts also pointed to other factors that affected this drop.

One factor of this change was people going on vacation rather than taking on renovation projects. Likewise, as the economic re-opening occurred across many states, the demand for new housing began to cool.

As it stands, lumber and other features of the forest industry face a more stable demand. However, due to the high volumes and prices of lumber sales this year, the outlook industry outlook remains positive.

Fortunately, lumber supplies remain high, especially in the southern US. As a result, you can still find a material handler to get the resources you need.

Pulp and Paper Products

Most people know what paper is, but fewer have heard of pulp before. Pulp is the raw material used in paper manufacturing. It is an abundant raw material across the globe, containing vegetables, minerals, and other fibers.

Manufacturers form it into a sheet on a screen. From there, they remove the moisture from the pulp. They utilize different processes to format their paper for books, newspapers, and magazines.

As we mentioned above, as more industries strive to go digital, more paper and pulp products decline in the US. However, as of 2019, the global paper and pulp market is valued at $65,510 million.

While the US may utilize less paper and pulp, this doesn’t mean the rest of the globe will follow suit. Some experts predict the market size will reach $88,150 million by the end of the decade.

The Forest Industry Remains Profitable

In short, the US’ forest industry remains a viable and profitable business. Although our production of forest products has declined, the US remains a global leader in the field. If you work in this industry, find ways to utilize this data and enhance your business!