While lumber futures hit a 9-month low this morning, I read this brief post with interest at Wood Business. The author, analyst Russ Taylor, President of the International Wood Markets Group, acknowledges that “U.S. demand for lumber has not been growing as forecast.” He confirms that sluggish single-family construction is “the issue”. With the exception of November (710,000 units) and December (675,000 units) last year, Taylor notes new single-family housing has been “stuck” between 590,000-650,000 units since late 2012. He reports a range of 583,000-654,000 in the first four months of this year. “In contrast, for the 14-year period 1994-2007, U.S. single-family housing starts surpassed 1 million units each month.”

In Taylor’s view, “Without a significant pick-up, lumber markets could become oversupplied by the wave of new capacity additions and/or shifts now coming on-stream in North America.” Little over one year ago at the 2013 COFI Convention in Prince George, Taylor’s bullish forecast contained a caveat; he cautioned that the key to the “super cycle” thesis was “sustained demand”, while suggesting that in his opinion, supply side dynamics were “the only thing that’s not changing” in the short term.