We wanted to take a moment and highlight a few positive trends we see in the overall economy, because it ultimately exerts a strong influence on our forest products markets. The Bureau of Economic Statistics published its Fourth Quarter Gross Domestic Product report this week. And, it showed a respectable 3.3% annualized rate of growth in the U.S. economy. This news is especially positive when we consider that during late 2022, several economists forecasted we’d see negative GDP growth for a few quarters in 2023. And, thankfully, that didn’t occur. The following two charts illustrate both recent and longer-term trends in U.S. GDP growth. Despite rapid increases in interest rates during recent years, economic growth has remained stronger than many predicted. We think relatively low energy prices, abundant liquidity in the economy, and tight labor markets all contribute to resilient GDP growth.
During the past 13 years, cumulative new household formations have outpaced cumulative new home completions, by about 4.6 million homes as shown further below. This suggests we could see increased levels of new home construction if new households desire their own home at the same pace past generations did.
While foreign demand for U.S. hardwood logs is currently lower than its 2022 highs, the most recent month’s export data show increases in monthly shipments for our region’s most important species: red oak, maple, white oak and cherry. Several factors indicate 2024 can offer spot market opportunities for improved prices, depending on species and location.
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