Wood is not just a raw material; it is also a concrete indicator of the state of the US economy. In recent months, the signals coming from the markets have been clear and thought-provoking. For those working in the sector, understanding these movements is not a theoretical exercise: it means anticipating trends that will influence production, prices, and supply chains globally.
Since the beginning of August, lumber futures have experienced a sharp decline, with losses exceeding 19 percent. Such a steep movement is not a simple market adjustment: operators are already pricing in a slowdown in consumption in the coming months. In response, major producers have begun cutting production. Interfor, one of North America’s leading lumber companies, announced a 12 percent reduction in output, citing macroeconomic uncertainty and weak demand.
Wood serves as an economic thermometer because its consumption is closely linked to the housing market. About one-third of all lumber used in the United States goes into building new homes. Historically, if GDP grows above 2 percent, lumber demand rises; if it falls below that threshold, demand declines. Today, the US housing market shows signs of cooling: sales of existing homes have decreased, and total transactions have reached levels not seen in the last thirty years. Inventory levels of unsold homes are high, while demand is constrained by elevated mortgage rates and a labor market that, though not in crisis, shows signs of weakening.
Additionally, trade uncertainty and tariffs on Canadian lumber initially created a speculative price spike, now followed by a decline. Even the prospect of a potential interest rate cut by the Federal Reserve does not seem sufficient to immediately stimulate demand. Market analysis therefore suggests that the US economy could face a more pronounced slowdown in the coming months, with effects that may ripple globally.
