Forest Economic Advisors annual U.S. Outlook for softwood lumber markets paints a picture of a short-term dip with major opportunities in the years ahead. While recovering residential-construction markets will drive U.S. lumber consumption higher over the next five years, the pent-up housing demand spurring this growth has been slowed by rising interest rates in late 2022 and 2023. FEA forecasts that residential improvements will slip in 2024 and 2025 after very strong years in 2020−2023, and that total consumption will dip from 51.6 BBF in 2023 to 51.2 BBF in 2024 before recovering in 2025. Some residential market forecasts are rosier, but the SLB will monitor the market and ensure balanced expenditures to be ready for slower growth.

Meanwhile, the SLB and its programs’ efforts to drive market opportunities in non-residential and multifamily construction and in mass timber remain more important than ever, with a potential incremental opportunity of 3.39 BBF through 2035. Wood construction has made measurable progress quickly in those markets: Wood’s market share in educational buildings, offices, banks, and commercial buildings grew from 4.1% to 6.2% between 2016 and 2022, an annual average growth rate of 7.5%. The market share for mass timber in those building types climbed even faster, at a 34.6% annual growth rate. FEA’s model has an average 20% target market share in 2035 for wood in non-residential construction, and 73% for multifamily construction. Investors can request a copy of the outlook by emailing info@softwoodlumberboard.org

In the face of financial headwinds, the SLB is watching market indicators closely while monitoring costs and ensuring a balanced budget.