At the end of 2015, I put together a list of predictions for global wood consuming businesses for 2016. While 2016 has provided many geopolitical and economic surprises thus far, the sluggish performance of the forest products sector is not unique to the industry. Rather, the underlying tenor of apprehension and global uncertainty has caused a degree of economic paralysis, limiting new investment in existing industries. This is simply the reality for now-the new normal, as we feel our way through a contentious US election season, a splintering European Union (EU) and complex global trade agreements.
Stumpage prices during July/August were a mixed bag, with all softwood products dropping slightly along with hardwood pulpwood. Hardwood sawtimber was the lone product that experienced a small gain in price. On a Southwide basis, pine pulpwood, pine sawtimber and pine chip-n-saw fell slightly during July and August. Hardwood pulpwood had the biggest drop of -5 percent, while hardwood sawtimber saw modest a gain of +1 percent.
The housing market held relatively steady as the summer months drew to a close. While August's housing starts data was somewhat of a disappointment, other sector indices demonstrated more volatility. The market for new homes surged in recent months while existing home sales have demonstrated a slower, more stable performance despite uncertainty surrounding the upcoming elections and fears that any slight economic slowdown might curb market momentum.
Natives and frequent fliers of Charlotte, North Carolina-home of Forest2Market's global headquarters-will recognize "CLT" as the airport code for Charlotte-Douglas International Airport and a moniker that the city has adopted for itself. However, CLT also stands for cross-laminated timber, a type of mass timber engineered wood product first developed in the 1990s that is gaining prominence in a sustainability and climate-focused, post-Recession world. The forest products industry, timberland owners, rural communities, "green" builders and environmentalists all have reasons to be excited about CLT and other mass timber products.
The composite southern yellow pine lumber price inched down during week 38 of 2016 to the $373/mbf mark. While prices have remained fairly steady through the summer months, this number is 14 percent above its January 2016 starting point of $326/mbf, and 26 percent above its 2015 week 38 price of $297/mbf.
Permanently converting valuable forestland to neighborhoods and shopping malls, or allowing national forests to become dangerous tinderboxes of wildfire fuel are destructive patterns of land management. The beauty of working forests is that they prevent the "either/or" predicament from ever taking place if they are allowed to remain working forests. As we recently reported, working forests benefit us all and provide irreplaceable environmental, economic and public benefits on an enormous scale.
July was a positive month for sectors that produce physical goods. Total industrial production (IP) rose 0.7 percent-the largest advance for the index since November 2014. Manufacturing output also experienced its largest gain (0.5 percent) since July 2015. New orders rose by 1.9 percent in July, led by transportation equipment (+10.5 percent). Ex-transportation, orders were a more modest +0.2 percent, and still 4.7 percent below year-earlier levels (the 21st consecutive month of YoY declines). Business investment spending, although +1.5 percent MoM in July, has contracted on a YoY basis (-7.2 percent in July) during all but two months since December 2014.
The US South is accustomed to dealing with severe and devastating weather events. From hurricanes and flash floods, to tornadoes and extreme droughts, this part of the country deals with its fair share of climate extremes. As we noted earlier this year, South Carolina experienced historical flooding last October due to rainfall from hurricane Joaquin that caused over $12 billion in damages. The storms that have overwhelmed parts of the US South this spring and summer continue to cause widespread social, economic and natural resource devastation.
Brand management best practices seemingly change overnight in the digital and social worlds, but there are timeless truisms that reflect basic human nature when attempting to connect the rational with the emotional. Establishing this connection is the #1 goal of marketers, yet many fall short because they overlook the fundamentals. In his 2003 book, The Brand Gap, author and brand strategist Marty Neumeier poses three enduring questions that have the power to bring high-level marketing and executive meetings to a screeching halt.
