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Brazilian furniture
exports retreat in 2006
Brazilian furniture
exports are estimated to decline 5% to $950 million in
2006, after four years of consecutive growth,
according to the Brazilian Association of Furniture
Industry (Abimovel). This is slightly better than an
earlier prediction of a 10% contraction. Four out of
thetop five importers of Brazilian furniture
registered reductions in imports. Imports by the USA,
Brazil's largest furniture market, dropped 25% to
$272.4 million in January to November 2006. Exports to
the UK (up 14% to $79.8 million in the same period)
and Argentina (up 55% to $69.3) were notable
exceptions to the declining trend.
House prices to remain
bullish in the short term
UK house prices rose 10.5% during 2006 according to
the Nationwide Building Society (NBS). Growth in
property prices continued to be strong in December
rising by 1.2%. NBS said that few sellers were coming
to the market and, as a result, price growth was
unlikely to moderate in the short term. The British
Woodworking Federation has reported that timber is
once again becoming of more interest to architects and
specifiers, and recommended to the trade to continue
to promote timber as a "green" material.
US housing starts recover slightly in November
Privately-owned housing starts recovered 6.7% in
November to a seasonally adjusted annual rate of 1.59
million units, according to the US Commerce
Department. This was, however, 26% below the pace of a
year ago. The recovery was due to an 8.1% jump in the
single-family sector, which accounts for about 80% of
the houses built. The chart below shows that
privately-owned housing starts have plunged 30% since
January 2006. Meanwhile, building permits (down 3%
from October) and housing completions (down 0.2%) fell
in November.
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Slumping US housing
market subdues lumber demand
Demand for lumber is being affected by the rapid decline
in the US housing market, according to Wood Markets.
Total US housing starts are estimated to fall 13% to 1.8
million units in 2006 and forecast to decrease by at
least another 11% to about 1.6 million units in 2007,
before bottoming out about mid-year, according to the
publication. Consequently, softwood lumber consumption
in North America (USA and Canada) is now expected to
slide 4% to 72.8 billion board feet (bf) in 2006 and
forecast to drop another 4% to 69.5 billion bf in 2007.
About 1.6 billion bf of the 6 billion bf decline would
probably come from reduced imports mainly from Europe
while the balance would be the result of lower North
American production. Weak prices are expected to
continue due to excess softwood lumber capacity unless a
more aggressive rate of curtailments and/or closures
occurs.
According to Russel Taylor, author of the report, the
second half of 2007 should be much better than the first
half after the bottom of the market cycle is reached.
The price spread between Europe and the US has widened
so much in the second half of 2006 that it is feasible
for North Americans to re-enter the European market to
achieve similar or even higher returns than are
currently available in the US market. |
