BOISE — The economic conditions of Idaho’s forest products industry improved dramatically in 2013 and industry experts believe the positive news will continue for at least the next few years.
The industry was hit hard by the Great Recession and suffered through some tough years, said Tom Beck, president of The Beck Group, a consulting company out of the Portland, Ore., area.
“Fortunately … things are much better in the industry than they have been for a few years,” he said. “This is an industry that is on the rebound, with excellent prospects for the foreseeable future.”
Housing starts jumped 15 percent last year and average U.S. lumber prices reached their highest level since 2005, according to a joint report by the University of Idaho and University of Montana.
U.S. lumber prices finished the year 19 percent higher than during 2012 and every segment of Idaho’s industry improved, according to the report, which was funded by the Idaho Forest Products Commission.
Idaho lumber sales increased from $572 million in 2012 to $680 million in 2013, paper and other primary product sales reached $1.2 billion, up from $1.1 billion, and secondary wood and paper products sales hit $575 million, up from $430 million.
Total industry sales reached $2.4 billion in 2013, up from $2.1 billion, and lumber production in Idaho mills was estimated at 1.6 billion board feet, a 7 percent increase.
During the recession, housing starts dropped from an average of about 1.5 million a year to 500,000 and, because 70 percent of lumber in the United States is used to build new homes or to remodel existing ones, the industry suffered.
More than 80 percent of Idaho forest products companies reported decreased profits, production and sales in 2009, according to the UI-UM report.
Idaho’s forest products firms made a lot of tough decisions during the recession and as a result are well positioned “to take advantage of increased demand for wood and paper products,” said IFPC Director Betty Munis.
According to a separate UI report about the Idaho industry’s current condition, “2013 was the first year of dramatic improvement in the industry since the economic recession ended in 2009.”
U.S. housing starts increased from 780,600 in 2012 to more than 900,000 last year “and lumber prices responded accordingly, reaching an eight-year high in the spring,” the report states.
The last couple of years have started out with what Tri-Pro Cedar Products Resource Manager Mike Boeck calls “false starts,” with industry conditions starting out stronger early in the year and then fizzling.
But this year looks different, he said. The company recently went from a 40-hour shift to a 60-hour shift at its sawmill in Orofino.
“Hopefully, we can go to 80 hours if things continue,” he said. “From our perspective, it’s looking better.”