Sawmill Capacity at Levels Not Seen Since the Great Recession but Still Can’t Keep Up with Demand

According to the Federal Reserve Board, North American softwood sawmill capacity is at its greatest level since the Great Recession. Capacity increased by 1.4 billion board feet in the last year. And the vast majority of that increased capacity — 1.1 million board feet — is coming from the Southern U.S. The American Wood Council (AWC), which represents 86% of the structural wood products industry, is reporting that “Many wood products companies have announced significant investments to expand the capacity of existing mills, however, lead times to get the new equipment remains long. In some cases, machinery is back-ordered up to 24 months — potentially extending the usual 12 to 24 months it would take to complete these types of projects. Manufacturing expansion projects are a long-term solution that will support increased capacity, but not until 2022 at best. The AWC says that “Despite the already high levels of production, and investments from manufacturers to upgrade and expand mill capacity, the unprecedented demand still exceeds the current supply. The most immediate opportunity to address constraints to lumber supply is to focus on transportation and workforce limitations. These challenges were present before the pandemic and have exacerbated the current situation.”

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Sawmill capacity grows to largest since Great Recession