Page 14 - Georgia Forestry - Summer 2019

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the escalating trade war, China has imposed 10 percent tariffs on $3 billion in paper and converted paper products and on $4 billion in wood products; a five percent tariff on $2.5 billion of wood pulp, paper and paperboard imports; and another five percent tariff on $3 billion of wood imports1.
In 2018, while U.S exports of paper products to China grew faster than imports, U.S. imports of wood prod- ucts from China rose 4.2 percent while exports were down 10.1 percent1. And the industry has been indirectly affected as well because of the widespread practice across industries of shipping tariffed products in corrugated boxes.
There are challenging trends in the domestic market, as well. “Changes in the composition of the total housing stock show lower aggregate demand for lumber from new household for- mation,” said Dr. Jeff Rosensweig, associate professor of finance and director of The Robson Program for Business, Public Policy and Govern- ment at Emory University’s Goizueta Business School.
Multi-unit housing starts, which typically require less lumber than single-unit houses, have increased to about 30 percent of the total housing stock2. And the median size of a single-unit home has decreased over the past five years from 2,500 sq. ft. to 2,300 sq. ft.2 “We have also seen a drop in hardwood lumber prices corresponding to the same period that houses have started to shrink,” Rosensweig said.
That change in the housing stock is being driven in part by demographics. “The continued shift towards in-town living will drive demand for hardwood lumber down, as younger generations prefer community living or delay purchasing a home,” Rosensweig continued. “And the aging of the Baby Boomers, which is reaching the point over the next 10 years when the bulk will be retired, implies that millions of people will eventually start moving into assisted living facilities, which won’t need as much lumber as new homes.”
Growing the demand for forest products in both domestic and global markets is critical to the industry’s ability to grow and thrive not just in the short term, but for the coming decades.
1) American Forest & Paper Association 2) Dr. Jeff Rosensweig
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