Sawmill capacity grows to largest since Great Recession – UW GROUP

Sawmill capacity grows to largest since Great Recession

North American softwood sawmill capacity is at its highest levels since the Great Recession, according to the Federal Reserve Board.

Capacity increased by 1.4 billion board feet in the last year. And the vast majority of that increased capacity – 1.1 billion board feet – is coming from the Southern U.S.

“Many wood products companies have announced significant investments to expand the capacity of existing mills, however, lead times to get the new equipment remains long,” reports the American Wood Council. “In some cases, machinery is back-ordered up to 24 months – potentially extending the usual 12 to 24 months it would take to complete these types of projects. Manufacturing expansion projects are a long-term solution that will support increased capacity, but not until 2022 at best.

“Home demand has only increased during the pandemic and builder confidence has been above 80 for the last nine months, with a rating of above 50 indicating positive conditions. Homes are going under contract at a faster rate than they are listed for sale even though new home listings are up 19.1 percent over last year. Permits for single- and multi-family projects were up 25.3 percent and 20.4 percent, respectively. The National Association of Home Builders reported that the pandemic also drove increased demand for remodeling projects.

“Despite the already high levels of production, and investments from manufacturers to upgrade and expand mill capacity, the unprecedented demand still exceeds the current supply. The most immediate opportunity to address constraints to lumber supply is to focus on transportation and workforce limitations. These challenges were present before the pandemic and have exacerbated the current situation.

The American Wood Council (AWC) represents 86 percent of the structural wood products industry. 


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