Canada’s Wood Product Manufacturing Industry: Industrial Outlook Spring 2005

The Canadian Industrial Outlook sets the stage for the Canadian economy by examining 10 key industries.

Document Highlights

After skyrocketing in 2004, profits in Canada’s wood products industry are expected to fall by half this year, mainly due to a 12 per cent drop in prices. The profit outlook will be worse if the softwood lumber dispute with the United States is not resolved, as expected, later this year.

The benefits of the end of the softwood lumber dispute will carry over into 2006, allowing for a 15 per cent gain in dollar profits. But profits and margins will remain largely flat from 2007 to 2009.

The wood products industry outlook includes special features on the softwood lumber dispute and on the U.S. housing market, which is key to Canada’s wood products industry. The near-term outlook for home building in North America has improved, as interest rates will remain lower for longer than expected, supporting demand for wood products. However, the medium-term outlook has not changed, with construction expected to slow to a pace that matches demographic trends.