Wood products industry: it’s in the money
OTTAWA: Canada’s wood products industry will record a second consecutive year of profitability, according to the Conference Board of Canada’s Spring 2011 outlook for the industry.
The Ottawa think tank said momentum is slowing this year following a solid rebound in 2010, the result of ongoing weakness in the US housing market and a slowdown in residential construction activity in Canada.
But the report noted cost-cutting measures implemented in previous years and industry efforts to diversify away the US market will keep the Canadian industry in the black.
Production growth will be 3.9% this year compared to 10.7% in 2010, but starting in 2012, more residential construction activity in Canada, rising exports to China and a recovery in the US housing market should lead to stronger production growth. However, the Conference Board doesn’t expect production to return to its 2005 peak through the period leading up to 2015.
The industry recorded losses totalling $1.6 billion between 2007 and 2009, but returned to profitability last year.
In 2011, the report forecasts pre-tax profits will increase by 13.8% to $694 million with margins of about 3.6%, and they will continue to rise over the next four years.
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Wood products industry: it’s in the money
