Local economy affected by low forestry prices

Published 6:00 am Monday, January 7, 2008

A story in Friday’s edition of The DAILY LEADER about theeconomic condition of the local forestry industry points to atroubling issue in a very important part of the area economy -lumber prices.

With the forestry industry seeing record low timber prices dueto a nationwide drop in housing starts, the subprime mortgagecrisis appears to be hitting the pocket books of area residents ina manner other than lower property values. Local lumber mills arereporting full inventories … which means lower prices at thestump for landowners … which translates into fewer dollars in thepockets of people who depend on the timber industry to make aliving … which affects local retail and service industries thatdepend on the strength of the spending ability of others.

Tied to all of this is the demand for housing across thecountry. With mortgage rates hovering above the 6 percent level,fewer houses are built and thus lumber demand decreases – not apretty picture.

The bright side of all of this for this area continues to be theafter effects of Hurricane Katrina. Rebuilding efforts along theMississippi coast keep a demand for lumber that keeps the millsoperating – but not at a price level of prior years.

Of interest to the contrary, one local builder shared with usthat his demand for new houses is far from shrinking as he has atwo-year waiting list. His problem is finding workers to buildhouses!

Let’s see. Lumber prices are down, which affects localemployment levels, but local builders cannot find workers to buildthe houses that homeowners are willing to build. “There is moneyout there that people are willing to spend,” the contractor said,”But I can’t find people to do the work to build the houses.”

Go figure.