U.S. Sawmill Output Continues to Trail New Home Construction

Original Source:
Domestic Sawmill Output Continues to Lag Home Construction

The National Association of Home Builders (NAHB) has provided a deeper look into the relationship between U.S. domestic sawmills’ inability to increase output to meet growing demand since mid-2020 and the resulting lack of new home availability. The NAHB cites the lack of increased domestic sawmill activity as one of the primary factors that has contributed to record high lumber and panel prices and continuing price volatility in both the lumber and housing markets.

The NAHB acknowledges that favorable demographics and low interest rates are the key factor in increased housing demand. Yet, as demand domestic housing has increased, housing inventory levels remain close to historic low levels.

A frequently cited reason for the lack of domestic lumber production has been a lack of labor, an issue that transcends well beyond the lumber and panel manufacturing and construction sectors in the U.S. economy. Bureau of Labor Statistics (BLS) data indicates that sawmill industry employment is higher than a year ago. According to the most recent available data from October 2021, sawmill employment was at 90,100 — a 2.4% year-over-year increase, or a gain of 2,100 jobs. Residential construction employment was also up during the same time period.

The result has been modest/moderate increases in sawmill production, just not sufficient to keep up with the growing demand for housing.

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