Jamie Lim, Ontario Forest Industries Association. (Supplied)

A report from TD Economics shows North American lumber prices are down 25 per cent since the middle of April — and that’s a significant drop, observers say.

Economist Dina Ignjatovic said when prices hit a nine-year high earlier this year, production climbed and inventories were rebuilt. Now buyers are "more willing to sit on the sidelines and wait to see how far prices will fall."

Jamie Lim of the Ontario Forest Industries Association called the drop "a growing pain," as the industry continues to rebound from the recession.

"I think that everyone should be expecting to see challenges like this when you go from such a dark period,’ she said. "For five years we were struggling to survive — and we did."

The TD Report says prices may be on the downswing right now, but they're expected to rebound by 30 per cent by the end of next year.