Figures released by Statistics Canada Monday showed that Canadian lumber prices continued to fall in May.
Lumber prices fell 1.6 per cent from April and are down seven per cent over the year. According to StatsCan's Industrial Product Price Index, lumber prices in May were 13 per cent below their levels in 2002.
According to the Scotiabank Commodity Price Index, benchmark 2x4 lumber prices hovered around $237 US per thousand board feet in late June.
Total Canadian sawn lumber production has dropped over 50 per cent since the onset of the US recession, according to a commentary released Monday by ATB economist, Will van 't Veld, who points to a lagging recovery in the U.S., Canada's biggest lumber market.
According to van 't Veld, it's a recovery that may still take some time.
"Today there are roughly 19 million empty American homes, … about 45 per cent higher than typical, which doesn't provide much incentive to build," he said.
"Excessive building prior to the recession is making things worse. Between 2004 and 2007 the housing stock increased by roughly 22 per cent more than was necessary to accommodate the formation of new households," according to van 't Veld.
The high value of the Canadian dollar has added to the woes of the forest products in industry. In May, the loonie was up 7.4 per cent, around the 103 cents U.S. range, over the year earlier.