Report Card: Forecasts from 2014 vs. 2015 Anticipated Results

Forecasts from 2014 vs. 2015 Anticipated Results

Preview to WOOD MARKETS 2016: The Five-Year Outlook – North America Wood Products

Forecasting is a difficult business and the WOOD MARKETS teams works hard to make sure its forecasts are grounded from the outset. Here is our preliminary report card on how we expect to do on a number of key forecast variables from our 2014 report, WOOD MARKET 2015: Five-Year North America Outlook. Note that all our forecasts were made one year ago (Q4/2014) – here is how we did:

 U.S. and Canada housing starts forecast: WOOD MARKETS’ 2014 forecast should come in extremely close to the actual results by the end of 2015 – our % variance to anticipated results and Grade are:

US Housing Starts:            3% low = GRADE: A
Canada Housing                0% off =  GRADE: A

Lumber supply and demand forecast: We also expect WOOD MARKETS’ 2014 forecast to be extremely close to actual results – our % variance to anticipated results and Grade are:

                                                USA                                            CANADA
Lumber Consumption       1% high = GRADE: A                      3% low = GRADE: A
Lumber Production           1% high = GRADE: A                      2% low = GRADE: A
Lumber Exports                 19% high = GRADE: C*                    0%      = GRADE: A
Lumber Imports                 2% high = GRADE: A                        0%      = GRADE: A

These results speak for themselves, so isn’t time to consider purchasing a WOOD MARKETS’ forecast and drop the highly variable forecasts of model-driven economists?

From the comprehensive work in our just released Global Log & Lumber Cost Benchmarking Report, WOOD MARKETS has the advantage of our unique insights into the cost competitiveness of key producing and exporting regions. Using this knowledge, we provide a grounded and realistic import, export and price forecasts. From our China office and many contacts in Russia, we obtain direct information from our own research and/or our network to properly factor in our internal assessment on China into our forecasts.

WOOD MARKETS: 5-Year Outlook – 2016 Edition will outline how global wood markets have changed, will continue to change, and how they will impact the U.S. and key export markets over the next five years. Key report features include:

  • Five-year forecasts for lumber and panel products;
  • Perspectives on global and North American economic and demand drivers;
  • North America supply and demand analysis, as well as import/export assessments in key countries;
  • Price forecasts for all wood product commodities: softwood lumber, softwood plywood, OSB, MDF and particleboard.

WOOD MARKETS 2016 is scheduled for release in early December 2015 with special pricing in effect now:

DETAILED REVIEW OF HOW WOOD MARKETS DID:
2014 Forecast vs. 2015 Anticipated Results:

There were lots of wild cards that occurred after the WOOD MARKETS 2014 was released, which always happens! For example, the huge correction in foreign currency rates was not anticipated by WOOD MARKETS or other forecasters. Nevertheless, there is still only one way to get a lumber or panel forecast right: that begins with getting the demand forecast right. And that comes from getting the housing starts forecast right.

As WOOD MARKETS has had one of the most accurate housing starts since 2008, here is how we look so far in 2015 when comparing our forecast conducted in early Q4/2014 with the year-to-date and anticipated annual results for the end of 2015 for a number of key variables.

Many might recall that after our 2015 forecast was released in Q4/2014, there were many other forecasters over the subsequent 3-4 months that were calling for 2015 U.S. housing forecasts to be 1.2-1.25 million units, with one forecast over 1.3 million starts. We now expect WOOD MARKETS’ U.S. housing forecast from over one year ago to be within 3% of the actual 2015 results (as outlined in the table). Most other forecasters will be 10-20% higher than WOOD MARKETS, where they had the benefit of many extra months of housing data to base their erroneous forecasts on.

With accurate housing and other demand drivers incorporated, the one-year old WOOD MARKETS 2015 demand forecast should end up being quite accurate. As WOOD MARKETS balances production, imports and exports relative to our demand forecast, our results are very realistic and, therefore, useful and practical for our subscribers to use in their business planning.

WOOD MARKETS has produced and published five-year forecasts on the North American market since 1996. What are you waiting for – Give us a try!