Canfor reduces production
Vancouver, B.C.-based Canfor is reducing its production volume to reflect market realities. The company pointed to “falling demand and poor pricing for softwood lumber with no indications of a market recovery in the near future.”
Canfor will be reducing workweeks at a number of its operations. In addition, Canfor’s Prince George Sawmill will move from three shifts to two and its Clear Lake finger joint operation from two shifts to one. This move will reduce Canfor’s annualized lumber production by approximately 600 million board feet.
NAR predicts housing upturn in second half of 2008
The National Association of Realtors (NAR) said its index of pending home sales — which measures signed purchase agreements in the United States — fell 1.9 percent month-over-month, though recovery is possible in the second half of 2008.
Pending home sales in February fell 4.9 percent month-over-month to 84.6, following an upwardly revised figure of 86.2 in January. The Pending Home Sales Index is a forward-looking indicator based on contracts signed. The February figures still are 21.4 percent lower than the February 2007 index of 107.6.
“Existing-home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” said Lawrence Yun, chief economist for the NAR. “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”
Regionally, pending sales rose 3.2 percent in the Northeast and 2.1 percent in the West. The index fell 3.7 percent in the Midwest and 5.5 percent in the South.
Existing-home sales are likely to rise from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter, according to predictions from the NAR. With relatively weak activity in the first part of the year, existing-home sales for all of 2008 are forecast at 5.39 million, increasing 6.6 percent to 5.74 million in 2009. The price of existing homes will probably ease by 1.4 percent to a median of $215,800 for all of 2008 before rising 3.7 percent to $223,800 next year, the group said.
“Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year,” Yun said.
Weyerhaeuser shuts down engineered lumber plant
Weyerhaeuser has announced it will close its Structurwood plant in Hudson Bay, Saskatchewan, by early July. The facility, one of nine Weyerhaeuser units that manufacture oriented strand boards, had an annual production capacity of 550 million square feet.
The decision will affect 170 employees, according to the company. The Hudson Bay facility had already reduced it production, in the spring of 2007, because of reduced demand. The mill will now be mothballed, although Weyerhaeuser has not ruled out other strategic alternatives.
“We will also use this time to explore transfer of ownership opportunities for this operation,” said Phil Dennett, Weyerhaeuser’s vp-strand technologies, in a prepared statement.