America's demand for lumber will shrink almost 30% this year from 2008 to total just 28.9 billion board feet, the Western Wood Products Association (WWPA) predicted Tuesday.

The Portland, Ore.-based group's forecast is based in part on the expectation that there will be just 432,000 housing starts in 2009, roughly one-fifth as many as there were in 2005. Home construction traditionally accounts for about 45% of annual lumber demand, WWPA says. It predicts about 5.3 billion board feet of lumber will be used in new home construction this year. In 2005, a total of 27.6 billion board feet was put into new homes.

"Since reaching an all-time high of 64.3 billion board feet in 2005, U.S. demand for lumber has dropped by more than 55%--the steepest decline in the history of the industry," the association said. It forecasts 553,000 housing starts in 2010 and no starts number above 1 million until 2012.

WWPA expects lumber production in the western United States will drop nearly 26% to 9.7 billion board feet, the lowest since the 1930s. Southern mill production will shrink shrink to 10.9 billion board feet. Canadian imports will drop 34.7% to 7.6 billion board feet, while imports from elsewhere are expected to drop by double-digit percentages, WWPA said.