The following is excerpted from the draft DNR Economic and Revenue Forecast, March 2013. Visit the DNR Economic Forecasts webpage for more information.
U.S. Economy And Housing Market. The U.S. economy continues its slow recovery from the Great Recession. The unemployment rate, which peaked at 10 percent in October 2009, is down to 7.74 percent as of February. GDP growth remains modest at below 2 percent on an annual basis for 2012. The housing market continues to show positive signs: new housing starts in January were at a seasonally adjusted annual rate of 954,000, their highest level since May 2008, and average U.S. housing prices have increased in each of the 11 months through December. However, the U.S. economy faces significant challenges. There are still too many unemployed workers; the financial crisis in Europe is improving but several European countries are now in recession; China’s economy has slowed; and Congress is now imposing blanket expenditure reductions across most federal programs.
Log And Lumber Prices. Pacific Northwest log prices were fairly flat for most of 2011 and 2012, but picked up in December and January. For example, the price for a ‘typical’ DNR log delivered to the mill averaged $479/mbf in 2012, down from $483/mbf for all of 2011. Log prices have since jumped to $507/mbf and $517/mbf in January and February, respectively. West Coast lumber prices are moving up sharply: the Random Lengths’ Coast Dry Random and Stud composite lumber price averaged $309/mbf in 2012, compared with $270/mbf for all of 2011, and has since risen to $378/mbf in January.