In March, EBPA led its third annual tour for lumber buyers from China and Southeast Asia. The group of seven companies from China and Taiwan participated in lumber grading workshops and visited lumber mills, lumber treaters, and re-manufacturers in Portland, OR and New Orleans, LA. The delegation also met with mill representatives and wholesalers during receptions each city.
The rising strength of the US Dollar compared to the Yen has impacted sales of US building materials in Japan. Coupled with an increase in the Japanese consumption tax from 5% to 8% in April 2014, new construction starts have slowed in the first half of 2015.
As linear projections go, most economists believe the probability that China's economy will be the world's largest in the next two decades is all but certain. One of the primary if often overlooked impediments that will govern how quickly China's economy reaches this point is the country's demographics.
Over the past few months, EBPA has been active leading and participating in several trade events in China and Japan, including two sales missions, a research mission, the Japan Lumber Importers mission, and the Japan Home Show US pavilion. In addition, the association held seminars in Portland, OR and Seattle, WA about leading emerging international markets and changes in established international markets for US building materials. The two seminars were very well attended by representatives from building products and related service sectors.
While domestic housing markets are improving, international markets continue to be an important part of many companies' sales portfolios. International markets can help companies minimize losses when domestic markets decline. Recent growth in international markets far surpassed domestic consumption and sales. While some markets have softened, they still offer major sales opportunities.
The State of the Economy
Quarter-over-quarter GDP growth on a seasonally adjusted basis was 2.2%, an improvement from Q2. Weaker growth in industrial production was partially offset by stronger agriculture and services sector growth. Slowing down at a more moderate pace suggests that the economy may be bottoming out.