U.S. demand for lumber will increase 6.1% this year to 32.9 billion board feet and another 9.7% in 2011 to reach 36.1 billion board feet, rebounding from 20-point declines the previous two years that left 2009 with the lowest production levels since World War II, the Western Wood Products Association (WWPA) forecast today.

The Portland, Ore.-based trade association based its outlook in part on expectations that housing starts will climb 11.9% this year to reach 618,000 and then rise another one-sixth in 2011 to 719,000 units.

Even with the increases, lumber demand and housing construction will trail far behind where we were in the middle of the last decade, and WWPA economic services director David Jackson said there are too many obstacles in the economy for us to expect a more robust recovery. "Our country hasn't really resolved the key problems that led to this downturn," WWPA's news release quoted Jackson as saying.

Production in the western United States will rise 7.1% this year to 11 billion board feet and then increase modestly in 2011 to 11.8 billion board feet. In the peak year of 1987, when production totaled 23.9 billion board feet, there were 702 mills operating in the West, WWPA noted. In 2000 there were 287 mills operating, and now there are fewer than 170 producing lumber today, it said.

Meanwhile, lumber production in the southern United States will hold steady this year at 11.7 billion board feet and then climb to 12.5 billion board feet in 2011.

"Lumber imports, mostly from Canada, are forecast to increase 10.7% to 9.8 billion board feet," WWPA said. "Assuming the U.S. dollar will weaken, giving foreign lumber producers some exchange rate advantages, import totals could grow to 12.6 billion board feet by 2011. Despite such an increase, the volume of foreign lumber entering the U.S. will be far below the record 24.7 billion board feet imported in 2005."