While the north state's forest products industry is rebounding from the construction depression, production levels are still below where they were before the housing bust.

"You are seeing an uptick in demand, but it is relative to a very low starting point," said Mark Pawlicki of Sierra Pacific Industries in Anderson. "The last few years have been so bad. So any increase at all looks pretty significant."

For example, says Pawlicki, U.S. housing starts are expected to edge near 800,000 this year, but that's below the long-term average of more than 1 million.

Sierra Pacific is the nation's second-largest timber producer with 3,700 employees who work at mills in California and Washington. The timber company employs roughly 3,000 in California.

Random Lengths' Framing Composite Price, a broad measure of North American lumber prices, was at $355 earlier this week, up from $263 a year ago. The Eugene, Ore.-based company tracks the timber industry.

"Lumber production has edged upward with the improved market, but generally has lagged the increases in housing," Random Lengths Editor Shawn Church emailed.

Church noted that manufacturers are reluctant to ramp up production because uncertainties like the "fiscal cliff."

The Edmonton Journal recently reported that Western Canada's forest product industry is buzzing due in large part to the rebounding U.S. housing market and higher lumber prices.

Church said that's a bit misleading.

"Western Canada is part of a broader upturn in North America forest products markets," he said. "Canada isn't necessarily riding a U.S. rebound. Canada has been relatively strong throughout the last five, six years, as it did not have the housing bust and economic turmoil that comes with it."

The Great Recession forced Sierra Pacific to close its Sonora mill in 2009, but the company reopened the plant in May 2011. Sierra Pacific's mill in Camino, which also closed in 2009, remains shuttered.

"We recently added a second shift at our large-log mill in Quincy," Pawlicki said. "Most of our mills are running at two shifts.

"We are producing, it's just that lumber prices are not anywhere near where they were in 2005 and 2006."

Sierra Pacific Industries expects 2013 to be better than 2012 as the economy continues its slow recovery.

"There is a lot of pent-up demand for housing," Pawlicki said.

The last few years, demand for lumber from home remodeling and repair contractors has outpaced new construction.

Pawlicki said that's rare.

Source: Redding.com

Posted and edited by Riona, Hanbao News Department

Contact: rionach@cltimber.com