Alberta forest industry rebounds on demand, prices and dollar
After some tough years, stars are aligning for the third largest industry in Alberta
Blame the low Canadian dollar, the tumbling price of oil or the American housing recovery — whichever the culprit, the Alberta forestry industry is happy.
Alberta's third largest industry was hit hard by the 2008 recession, clawed its way back and then was hit with a price drop last year.
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Now the stars are aligning, with the price of spruce, pine and fir starting to rebound.
"It's really been a long haul. We had some really down years. And some really tough years. Here, we dropped to a single shift," said Ed Kulcsar, woodlands manager at Spray Lake Sawmills in Cochrane.
"And now we're back to a double shift operation. And like I said, things are looking optimistic for the future."
Strong U.S. housing market giving boost
Brock Mulligan, with the Alberta Forest Products Association, said a lot of that positive change can be linked to the housing market in the U.S., which hasn't hit historic highs but is rising from its once-calamitous lows.
It's "definitely going to be a driving factor," he said.
The recovery has been a long time coming, according to Todd Hirsch, ATB Financial's chief economist.
"There were a lot of things working against the forestry sector eight or 10 years ago. But now things are aligning in favour of the forestry sector," he said.
He cites the recovery in lumber prices and the low Canadian dollar, which makes the country's raw goods more attractive to U.S. consumers.
Hirsch also said the downturn in oil and gas means it's easier for mills to attract and keep skilled labourers without having to compete with the high wages in the energy sector.
"I think there's general optimism in the industry as we move forward," said Kulcsar. "All the indicators are trending upward. And we should be in good markets for a few years now."
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