It’s the perfect storm for B.C.’s forest industry.
A rebounding U.S. housing market, demand in China, and now Hurricane Sandy, which destroyed billions of dollars worth of homes and infrastructure in the Northeastern U.S. that must be rebuilt.
Skilled labourers have abandoned the long-dormant industry, and now massive labour shortages are predicted as mills and logging camps get back to work.
‘COME ON BACK’
“As demand ramps up, we’re not going to find the employees we need,” said MaryAnne Arcand, executive director of the Central Interior Logging Association, who predicts her industry will be short 2,000 skilled workers.
“Now we’re saying, ‘it’s good business, it’s good money, come on back.’ ”
Arcand said long gone are the days when loggers had children who became loggers, who had children who became loggers.
“It used to run in families,” said Arcand. “But over the last decade kids would hear, ‘We can’t go on vacation because there’s no work,’ or, ‘We can’t buy a truck because I don’t know how many shifts I’ll get.’
“Loggers would tell their kids, ‘Go to school, learn to use a computer, stay out of the bush.’”
OUT-OF-PROVINCE, IMMIGRANT WORKERS
The devastating U.S. housing crash in 2008 saw many skilled workers cross over to other, more prosperous, heavy industries, such as mining and oil and gas.
Now the challenge is to get them back, or recruit others to fill their spots.
“We’re bringing in people from New Brunswick and Nova Scotia, just like the oilpatch is, and we’re looking at immigration to bring in foreign workers,” she said.
Dwight Yochim, executive director of the B.C. Truck Loggers Association, said after the crash of the century for B.C. logging, demand is springing back.
“The past few years were really tough, many of our members went down to skeleton crews,” Yochim said.
“Now a lot of companies are gearing up, and some are even turning down work.”
HOUSING MARKET REBOUND
Yochim said most of the upswing is due to early signs of a rebound in the U.S. housing market, which saw housing starts drop to 1950s levels after a decades-long boom went bust in 2008.
That meant that B.C.’s 10 per cent share of the U.S.’s $500-billion residential home market evaporated, leading to the shutdown of 23 mills in B.C.
“To have relied on the U.S. housing market for the last few decades worked, but when we saw the huge crash, it caused us to crash too,” Yochim said.
“Now we are starting to see their market come back, and you start to layer on other events like the huge storm.
“As bad as it sounds, the demand from Sandy will start to add to demand for logs in the next few months, with rebuilding needs.”
Yochim said the question now is whether B.C. companies will have the infrastructure needed oiled up and ready to go after the past few years’ downturn, not to mention adequate manpower in a rapidly aging workforce.
“We are working with the province on a strategy to replace the aging demographic with some new blood, because that will be a big factor [hindering productivity].”
SANDY SECONDARY TO DEMAND
Steve Thomson, Minister of Forests, Lands and Natural Resources, said lumber prices were already up 18 per cent in October compared to October 2011, and speculative price pressure connected to Sandy damage is moving lumber prices even before real demand from building permits comes through.
“Certainly we are seeing an uptick in pricing and industry activity [in B.C.]” Thomson said.
NDP forestry critic Norm Macdonald said the government should have been training workers for the inevitable forestry turnaround.
“There are challenges around availability of skilled labour, but we’ve been working with industry associations to put training in place,” Thomson said.
David Elstone, an analyst with ERA Forest Products Research, says Sandy is not as important to the overall picture as increased demand in the U.S. and China.
“It’s a one-off event,” said Elstone. “It won’t be, ‘Oh, my god, Sandy is crazy.’ It’s part of the mosaic of overall demand.”
Elstone said markets move on the expectation of future changes, but have a tendency to overreact.
“There will be some rebuilding, and people get excited about it, especially in the commodities trading area.”
The analyst said the Northeastern U.S. is still in recovery mode, and not yet in rebuilding mode.
“Right now, they’re just trying to recover, to get back to a state where they can function,” he added.
Elstone said Hurricane Katrina, which devastated New Orleans in 2005, had little overall effect on lumber markets.
Source: Calgary Herald
Posted and edited by Riona, Hanbao News Department
PREVIOUS
NEXT |