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Market Brief

Global lumber demand in 2016 has proven stronger than every economic indicator that suggested it should have been weaker, including the strong dollar, global economic malaise, and the hangover buyers should’ve had after the Fall 2015 buying spree. Even the summer slowdown was atypical. Jul shipments to China set an all-time, one-month record—in a typically slow month—and year-to-date totals were up 19% to Asia and 10% to Europe. Housing construction is now winding down towards winter, and with it will trend domestic lumber demand. Still, single-family starts managed an 11% year-over-year increase through Jul. Realtors and builders say 2016 gains would have been greater if not for tight inventories and labor shortages, respectively. With home prices trending higher and mortgage rates still near historic lows, it’s probable that more homes didn’t hit the market because sellers weren’t confident enough in their job security to risk a move up.