Page 8 - Tree Line - North Carolina Forestry Association - First Quarter 2024

What Will 2024 Bring?
An Overview of the Economic Landscape and Its Influence on the Forestry Sector
Pete Stewart, President and CEO, ResourceWise
As we reflect on the recent events that have transpired across the industry in 2023 and look toward what we anticipate 2024 to bring, we must focus on the global supply chain and its ongoing influence on market dynamics.
Below is our comprehensive analysis of the current state of the global economy and supply chain in the forest products industry, along with our predictions for the upcoming year.
1| The inventory destocking that occurred in virtually every industry in 2023 is coming to an end. This brings positive implications for the global pulp and paper
industry and solid wood and lumber markets. Inventory destocking was one of the more important factors that contributed to the 2023 economy. With the end of destocking and indications that the Federal Reserve’s interest rate
hikes are also coming to a close, confidence in the economy has been embedded. This sets the stage for a resurgence
in economic activity within the industrial sector, which is expected to occur in the first quarter of 2024.
2|Homebuilders have swiftly adapted their strategies to the current high-interest-rate environment.
With interest rates expected to remain high until the Federal Reserve eases rates, builders have responded by offering interest-rate buydowns along with building smaller and, in some instances, more affordable homes. This includes making adjustments to certain features to accommodate the changing market dynamics.
3| The forests in the U.S. South, including North Carolina, boast incredible productivity and offer
some of the most cost-effective fiber in the world. As we look ahead to 2024, landowners may hope for a surge in log and fiber prices, but unfortunately, the supply and demand balance is weighted towards too much supply. However, there is a silver lining to this. The low cost of log fiber serves as
an incentive for new manufacturing, increasing the demand for logs and fiber. Therefore, we anticipate that the majority of new investments in the forest products industry will be concentrated in the southern region in 2024.
6 ncforestry.org / FIRST QUARTER 2024