January 3rd, 2006

Region's lumber production expected to top out this year

By David Steves
The Register-Guard
Published: Friday, December 16, 2005

The report said mills in the 13-state region will put out 19.1 billion board feet this year. That's the most since 1990, when mills produced 21.2 bbf. The record is 23.9 bbf produced in 1987.

But in 2006, mills in the 13-state region are expected to see a production decline to 18.7 bbf, said association spokesman Robert Bernhardt, Jr. He said the rise and fall in regionwide production - up 1.6 percent this year and down 1.9 percent next year - are likely to be seen in Oregon's lumber output, although state level figures was not yet available for 2005 and 2006. "Oregon is the largest lumber producing state in the country and comprises 38 percent of the Western total," he said. "So it will likely move in the same direction as overall Western production."

Jobs in wood products manufacturing also are on pace to exceed last year's. Through November, the state has averaged 32,700 jobs in that sector this year. That's up 800 jobs or 2.5 percent from the wood-product manufacturing employment totals in 2004. And while Western lumber production is expected to fall off next year, jobs in that sector are not, in Oregon.

State labor economists are projecting wood-products manufacturing employment to grow modestly, adding about 300 jobs in 2006 to reach 33,000 jobs. That would continue a steady climb from 31,100 jobs in 2003. But lumber-mill jobs are expected to decline after that, dropping by a few hundred jobs each year until levelling off at 29,900 in 2010.

Bernhardt said 2005's big production numbers were something of a surprise. Most experts had anticipated that the strong
demand for construction materials would have waned by year's end. While interest rates have climbed, they remained low
enough that the nation's demand for plywood and lumber - vital for new housing construction and residential repair and remodeling projects - held strong throughout 2005.

The 2 million homes forecast to have been constructed this year will have used more than 27 billion board feet of lumber. Slower home construction in 2006 will reduce demand by 2 percent to 62.4 billion board feet, according to the lumber association's forecast.

While the forecast covers the 12 Western states plus Alaska, Bernhardt said a disproportionate share of the production boom has been felt in Western Oregon and Washington, which produce Douglas fir and other soft woods - those species most suitable for production of plywood and dimensional construction lumber used in housing. In addition, he said, mills west of the Cascades have been able to transition from getting timber from publicly owned forests, where logging has been curtailed, to relying on private forests.