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Forestry-Related Industry Performance At a Glance: June 2010

Forestry-Related Industry Performance At a Glance: June 2010
Factory output continues to be a bright spot, but construction spending – especially the residential component – is unlikely to add substantially to GDP growth for quite some time.

Although the Institute for Supply Management’s reports on manufacturing and service-sector activity showed stable or slightly slower rates of growth in May, new orders across all of the industries related to the forest products sector showed promise (Table 1).

wood products and paper industries performance - july 2010

Table 1. Performance overview for Forest-Related Industries.

Data source: Institute for Supply Management

New orders were up across the board in these industries. Most of those new orders were placed by domestic firms, though, as new export orders were less robust. The lack of export orders is not surprising in light of recent dollar strength; continued appreciation will likely undercut U.S. exports and reduce domestic manufacturers’ market share of the U.S. and global markets.

Inputs cost more in May, although the price increases were smaller than in April. Commodities whose prices rose in May included corrugated products and containers, fuel, lumber and wood products, paper and paper products, and pulp.

Across all industries, the U.S. Census Bureau reports that shipments, which have gained ground ten of the last eleven months, increased $2.5 billion or 0.6 percent to $422.3 billion. (Table 2).

shipments inventories & new orders - us census bureau - 2009 to 2010

Table 2. Shipments, Inventories & New Orders, by Industry.

Data source: U.S. Census Bureau

Shipments of wood products rose 4.9 percent, to $7.3 billion dollars—t he fourth consecutive monthly increase. Paper products shipments took a breather after rising for seven months and remained unchanged (Figure 1).

value of shipments - by industry - us census bureau - 1995 to 2009

Figure 1. Value of Shipments, by Industry.

Data source: U.S. Census Bureau

Data from the Association of American Railroads provides another (and in this case, more pessimistic) view of shipping activity in the United States. Rail traffic fell by double-digit percentages in April, relative to March, but most categories are still well ahead of year-earlier volumes (Table 3).

us rail traffic - by commodity - association of american railroads - 2009 to 2010

Table 3. US Rail Traffic, by Commodity

Data source: Association of American Railroads

Inventories, up six of the last seven months, increased $2.6 billion (0.5 percent) to $521.7 billion (Figure 2). The inventories-to-shipments ratio was unchanged at 1.24. Inventories of manufactured durable goods increased 0.7 percent, thanks to primary metals. Wood products inventories backed off 0.7 percent, after four months of increases, while paper products rose 1.0 percent.

value_of_inventories_-_by_industry_-_US_Census_Bureau_-_1995_to_2009.jpg

Figure 2. Value of Inventories, by Industry

Data source: US Census Bureau

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