Housing starts still sliding but single family units up

WASHINGTON, D.C. - The National Association of Homebuilders reports that April housing starts declined 12.8 percent to a seasonally adjusted 458,000 units. Single family housing starts rose slightly to a seasonally adjusted 368,000 units but multi-family sector starts dropped to 78,000 units, down 42 percent from the previous month.

Regionally, housing starts increased 42.5 percent in the West, but declined elsewhere, 30.6 percent in the Northeast, 21.4 percent in the Midwest and 21.1 percent in the South.

April housing starts also declined in Canada - to just 117,000 units, 20 percent lower than March on a seasonally adjusted basis. Canadian single and multi-family starts are grouped nationally by urban centers and rural areas. Total urban starts sank 24 percent in April. Urban single family starts declined 8.7 percent t 42,400 units while urban multiple unit construction dropped by 32.7 percent to just 55,000 units. Meanwhile, rural starts increased by 20,600 units.

Province by province, only British Columbia reported a slight 1 percent gain. Elsewhere, the news was not good. Housing starts in Ontario plummeted by 43.7 percent, Quebec was down by 7.1 percent, the Atlantic Provinces by 16 percent and the Prairie Provinces by 3 percent.

U.S. home sales up modestly

WASHINGTON, DC - The National Association of Realtors reports that sales of existing homes rose a modest 2.9 percent in April to an annual rate of 4.68 million units, up from 4.55 million units in March. About 45 percent of April sales were foreclosures or short sales and NAR confirms that distressed property sales have driven home prices still lower again. The median price for an existing home sold in April was $170,200, down 15.4 percent from April of 2008. The inventory of unsold homes in the U.S. now stands at 3.97 million - a 10.2-month supply at the current sales pace.

Job losses appear to be softening

WASHINGTON, D.C. - The U.S. Labor Department's June 5 jobs report hints at the possibility that the nation's long recession may have started to wind down. Non-farm payrolls slid 345,000 in May, well below the 525,000 job losses most economists had expected. Last month's drop was the smallest since September of 2008. Even so, job losses now stand at a 25-year high, a fresh reminder that even if the economy does stabilize over the summer, recovery will come slowly because most companies will be reluctant to hire or call workers back to work until they are certain the worst is over.

Long term housing market will be robust

CAMBRIDGE, MASS - Although U.S. lumber markets are in worse shape than they have been at anytime since the end of World War II, the long-term outlook for softwood lumber, which is used mainly in home construction, is considerably brighter.

This according to a just released study by Harvard University's Joint Center for Housing Studies, which projects the formation of 14-15 new households over the next decade. The study is in line with historic housing data which affirms that births, immigration and replacement housing total about 1.5 million units per year.

Lower interest and lower average home selling prices are expected to boost the market as the nation's jobs picture improves. There is also the expectation that, as homeowners give up on the idea of selling their home, they will instead remodel. Remodeling magazine reports that several Midwestern window manufacturers including Pella and Anderson are already ramping up production in anticipation of increased sales to homeowners who decide to add rooms to their houses.

Weyerhaeuser and Chevron hoping to crack bio-energy's Holy Grail

VANCOUVER, B.C. - The world's largest integrated forest products company and one of the world's largest oil companies have joined forces in a bid to crack what Vancouver Sun writer, Gordon Hamilton, calls "bio-energy's holy grail: converting trees and plants to hydrocarbons."

Catchlight Energy, a joint venture between Weyerhaeuser, based in Federal Way, Washington, and Chevron, based in San Ramon, California, hope to do with technology what it takes nature millions of years to do: turn biomass from Weyerhaeuser's vast U.S. tree farm into hydrocarbon fuel - a liquid that would burn as efficiently as fossil fuels but would be made from plants.

Catchlight president Michael Burnside outlined the joint venture plan at a Vancouver forest and paper products conference sponsored by PricewaterhouseCooper's, a major accounting firm with clients in the forest products sector. Burnside explained that it will be Weyerhaeuser's job to provide sufficient biomass and Chevron's job to figure out how to speed up a process that took nature eons to complete.

To grow sufficient fiber, Weyerhaeuser plants to plant an American prairie grass called switchgrass between rows of trees in its plantation in the U.S. South. Such interplanting is fairly common in the South, especially among landowners who also provide habitat for wildlife. Switchgrass grows rapidly and can be harvested annually, effectively doubling annual per acre biomass production.

Duke Energy invests in carbon offsets

RALEIGH-Durham, NC - The Raleigh-Durham Triangle Business Journal reports that Duke Energy will plant trees on more than 1 million acres in seven lower Mississippi Valley states as part of its plan for producing carbon offsets.

Under the program, called GreenTrees, which will be managed by Virginia-based C2I, 302 hardwood and 302 cottonwood trees will be planted on every designated acre in Louisiana, Mississippi, Arkansas, Kentucky, Tennessee, Missouri and Illinois.

"Federal climate change legislation will set the stage for an active carbon-offset market in which the demand for domestic offsets will significantly exceed supply," explained Keith Trent, Duke Energy's chief policy, strategy and regulatory officer. "We view GreenTrees as the most innovative afforestation and carbon-offset project in the United States."

C2I founding partner, Carey Crane, says the program pays private landowners to replant, allowing C2I to develop verifiable offset for specific volumes of carbon. The company will enter into 70-year agreements with landowners.

Duke Energy, based in Charlotte, owns a diverse mix of power generating facilities including 13 hydroelectric dams, 3 nuclear plants, 17 coal-fired plants and 13 facilities that burn oil or natural gas. It needs the carbon offsets to balance emissions from its coal, oil and gas-fired facilities.

Plum Creek is Florida's largest private landowner

ST. PETERSBURG, FLA - Plum Creek Timber Company, a real estate investment trust based in Seattle, Washington, is now Florida's largest private landowner, usurping the old St Joe Company which was for any years Florida's largest landowner.

According to Cynthia Barnett, who writes for FloridaTrend.com, a Florida business website, St. Joe, which was once Florida's largest timber company, is down to its last 585,000 acres. That puts it behind Plum Creek, which owns just over 600,000 mostly forested acres in 22 counties.

Plum Creek, which owns more than 7 million acres nationwide, is the largest private landowner in the United States.

Plum Creek shuts down two more Montana plants

COLUMBIA FALLS, MT - Seattle-based Plum Creek Timber Co., the largest timberland owner in the United States, announced June 4 that it is closing down two more Montana milling facilities - its Kalispell stud mill and stud remanufacturing plant. The closures, which take effect June 16, are "indefinite" according to company officials. Earlier this year, the company permanently closed its' sawmills at Fortine, north of Whitefish, and Pablo, south of Polson.

"The company's manufacturing business has been hard hit by industry turbulence over the past several months," said Plum Creek President and Chief Executive Officer, Rick Holley. "We have done everything possible to keep these facilities running, but improving their efficiencies was not enough for our Evergreen stud operations given the current markets."

Sixty-three employees will lose their jobs in this latest round of Plum Creek closures. The company continues to operate its' pine sawmill and medium density fiberboard plant at Columbia Falls.

Canfor closing three plants

VANCOUVER, B.C. - Vancouver-based Canfor, is closing down three of its British Columbia sawmills, idling almost 600 workers at Kamloops, Radium and Prince George. The shutdowns represent 11 percent of Canfor's total capacity and leave it with about 50 percent of its total sawmilling capacity.

Canfor CEO, Jim Shepard, said that while shutdown decisions are never easy, this one was made necessary by the hard-hit U.S. housing market. About 80 percent of all lumber manufactured in Canada is exported to the United States.

Canada's business press also blamed the 15 percent import duty Canadian mils must pay to ship their lumber into the U.S. Also cited was the fact that the U.S. dollar is declining in value against the Canadian dollar, which works an additional hardship on Canadian mills that sell their lumber in U.S. markets.

Paul Quinn, an analyst at the Royal Bank of Canada, called Canfor's decision "very responsible" in light of market conditions. Although Quinn believes U.S. housing markets are at or near their bottom, he predicts a slow recovery.

Big biomass plant planned for Interior British Columbia

HANCEVILLE, B.C.- The British Columbia government is partnering with Western Biomass Power Corporation and the Tsilhqot'in National Government, a First Nation's tribal government, to construct a $260 million, 60-megawatt power plant near Hanceville.

The facility, which expected to employ more than 250 when it is completed, will be fueled by dead lodgepole pine trees killed by the mountain pine beetle epidemic that has swept over much of Interior British Columbia over the last five years.

"There are literally mountains of these trees, said Jeff Paquin, Western Biomass Power's manager of business development. "We're addressing that by using waste wood to create energy. The objective from day one was to do something useful with this otherwise useless wood."

Paquin said the project has several environmental, social and economic benefits. Among them, a reduction in the risk of fire, much needed employment in economically depressed Interior B.C. and improved plant and wildlife habitat  An study of the areas biomass supply indicates there is a 25 year supply along roadsides, alone.

The Hanceville biomass project is one of several on the B.C. government's drawing board. British Columbia's provincial governments have long been major boosters of the region's forest products industry which is, in turn, a major employer in the province.

Although the same biomass potential exists in dead and dying federal forests in the western U.S., rural communities and state governments continue to slug it out with hard line environmental groups that oppose removing dead and dying trees from U.S. federal forests. Recently, the U.S. House of Representatives voted to exclude federal biomass from new renewable energy legislation working its way through Congress.