Market for Wood Products Impacted in 2021’s Fourth Quarter

Statistics Canada

Severe flooding in British Columbia disrupted the activities of the Canadian corporate sector in late 2021. In the fourth quarter, adverse weather events (accompanied by severe flooding) in British Columbia affected business activity; the wood products industry was among the most impacted. In November, sawmills in Canada increased production as higher construction activities in the United States spurred an increase in the demand for Canadian lumber products; this added upward pressure on prices of logs, pulpwood, natural rubber, and other forestry products, which rose 4.3% according to the Raw Materials Price Index.

Despite increased production, sawmills saw their inventories grow as flooding reduced the ability of wood and paper product manufacturers to bring products to market, resulting in a quarterly decline of 15.4% in NIBT.

Manufacturing businesses in the eastern provinces were also affected, as disruptions in rail service from the Port of Vancouver posed a supply constraint. The effect of the flooding was felt by insurance carriers who saw an increase in the number of claims. According to the Insurance Bureau of Canada, 2021 was among the highest loss years on record as severe weather caused $2.1 billion in insured losses. Of this, $515 million of damages resulted from the flooding in British Columbia. The increased claims prompted a decline in the NIBT of property and casualty insurance carriers in Canada by 13.9% during the fourth quarter.

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