Selective Cuttings

Selective Cuttings

Home or abroad? The changing patterns of provincial lumber shipments

February 21, 2013

Since they hit rock-bottom at the beginning of 2009, lumber shipments from provinces across Canada have generally stabilized or recovered (see Figure below). In the process, provincial patterns of preferred destinations for lumber shipments (i.e. domestic or export) have been affirmed.

Total lumber shipments by province (six-month moving average)

This line chart shows how lumber shipments of all provinces bottomed in 2009 and have since stabilized or recovered.

Shortly after the U.S. housing crash, Quebec and Alberta started focusing even more on supplying the domestic market (see below Figure a). Even after the U.S. housing sector started to show signs of recovery, the share of domestic lumber shipments from Quebec and Alberta kept on increasing supported by strong domestic construction. They went from about 53% by the end of 2006 to 68% by the end of 2012.

British Columbia has always been export-focused and the crisis has not changed that. What has changed is where it exports: the boom of Chinese demand for BC lumber that started in 2010 actually resulted in a decreased volume (and share) of domestic shipments (Figure b).

New Brunswick, Ontario and Nova Scotia shipments are highly dependent on exports to the U.S. and the least stable. The crash of the U.S. housing all but stopped their exports to the U.S. This resulted in an increase of the importance of domestic shipments (Figure c) and/or a strong adjustment of shipments (Figure above). A reverse process was initiated when the U.S. housing sector started its recovery in 2010. Ontario’s shipments are increasingly sent to the U.S and should eventually show stronger signs of recovery as the U.S. market keeps improving.

Domestic share of shipments (six-month moving average)

In this line chart, the domestic share of lumber shipments from Quebec and Alberta has been increasing from about 53% by the end of 2006 to 68% by the end of 2012. The domestic share if shipments for BC has been relatively steady, dropping a little since 2010. Ontario and Nova Scotia’s domestic share of lumber shipments increased from 2007 to 2010 and declined afterwards. Nova Scotia’s shipment patterns are more erratic.