General outlook: The U.S. economy continues its sluggish and long, drawn-out recovery from the Great Recession. The unemployment rate, which peaked at 10.0 percent in October 2009, is down to 7.6 percent as of May. GDP growth remains modest at below two percent over the last four quarters ending in March. The housing market continues to show positive signs: new housing starts in the first four months of 2013 averaged 935,000 (seasonally adjusted annual rate) and average U.S. housing prices have increased in each of the last 13 months through February.
Log and lumber prices are up in 2013. Pacific Northwest log prices were fairly flat for 2011 and most of 2012. The price for a ‘typical’ DNR log delivered to the mill averaged $483/mbf in 2011 and $479/mbf in 2012. Log prices have jumped to an average of $559/mbf in the first five months of 2013, an increase of 23% over the $476/mbf average in the same period in 2012. West Coast lumber prices have also moved up sharply: the Random Lengths’ Coast Dry Random and Stud composite lumber price averaged $270/mbf in 2011 and $309/mbf in 2012 and has moved up to an average $407/mbf in the first four months of 2013. Lumber prices softened in May and are not expected to return to the recent highs during the rest of this year, but there will likely be considerable volatility.
Source: DRAFT June 2013 DNR Economic and Revenue Forecast Highlights.