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Individual Highlight

Connecting future residential construction and lumber demand in the United States

Photo of U.S. single-family house construction typically involves softwood framing lumber and structural wood-based panels, especially oriented strand board.
U.S. single-family house construction typically involves softwood framing lumber and structural wood-based panels, especially oriented strand board. Snapshot : Housing starts can be predicted by the rate of overall economic growth, and such a prediction informs estimates of future softwood lumber consumption in the U.S.

Principal Investigators(s) :
Prestemon, Jeffrey P.  
Research Location : United States
Research Station : Southern Research Station (SRS)
Year : 2018
Highlight ID : 1466

Summary

Future forest conditions in the U.S. depend in part on timber harvest rates, which are a function of overall demand for wood in construction. For the 2020 RPA Assessment, we developed a simple yet highly accurate model of housing starts as a function of aggregate inflation-adjusted (real) economic growth, recent start activity, and mortgage delinquency rates, along with similarly simple models of softwood lumber demand as a function of current starts and economic growth. Given alternative assumptions about future economic growth in the U.S., we can better understand how a range of possible economic growth rates will lead to a range of construction rates and softwood lumber consumption rates. At recently observed real economic growth rates of 2.4% per year, starts would average about 1.2 million per year, while growth of 3% would lead to starts averaging 1.3 million and growth of 0% would have starts at 0.9 million. Softwood lumber consumption would grow at about 0.5% per year if economic growth were at recently observed rates, increase at 1.3% per year if real economic growth were 3%, and would decline by 2.5% per year if real economic growth were zero. Given that economic growth over the coming decades is unlikely to exceed 3.5% and more likely to average less than 2%, softwood lumber consumption will likely grow by less than 0.5% per year, on average. 

Forest Service Partners

External Partners

  • David N. Wear, SRS
  •  Karen L. Abt, SRS 
  • Robert C. Abt, North Carolina State University

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