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Lumber production edging higher

Lumber production edging higher

Posted on: 10/15/2018 | Author: ATB Financial's Economics + Research Team

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For dozens of communities along the western and northern regions of Alberta, it’s not cattle, wheat or even oil that drives the economy. It’s forestry. And lately, the rising level of activity has driven the slow but steady drive to greater economic diversity.

In July, lumber shipments from mills across the province totalled just over 789 thousand cubic meters. And in May of this year, shipments hit a record high of 907 thousand cubic meters.

There is some seasonality to lumber shipments, with January and February typically the lowest months. Over the last complete 12 months, total shipments of lumber in Alberta have averaged slightly higher (+1.8 per cent) above the last six-year average. That’s not much of an increase in volume, but production has been constrained by the maximum capacity of the mills.

Fortunately, the value of lumber shipment has increased even if the volume hasn’t risen by much. That’s due to higher prices for lumber over the last six years. Prices reached a record high in June of this year, topping out at $C 740 per thousand board feet. While prices did pull back sharply over the summer and into September, prices are still double what they were at the start of the decade.

All of this is good news for Alberta lumber producers and the thousands of women and men who work at mills across our province.

Lumber shipments, graph​​

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