Economic Outlook - March 2009

The general economy in the U.S. will continue to contract in 2009, with predictable impacts on employment and consumption. Oil prices will remain low (around $35/barrel) through April, but they will then trend higher for the rest of the year. Despite lower transportation costs, reduced demand and a stronger dollar have put a dent in exports of U.S.-manufactured forest products. The housing market shows some signs of turning a corner. Two indexes published by the National Association of Realtors indicate we are near the bottom: the Housing Affordability Index, which shows that homes are more affordable now than at any time in the last 25 years, and the Pending Home Sales Index, a forward-looking indicator based on signed contracts, which was revised upward for November and rose 6.3 percent in December. While housing may begin a recovery in 2009, however, the way back will be slow and far from smooth because of weakness in the general economy.

View the chart below for a closer look at the performance of the wood and paper products industries in January 2009.

Read more about the Forest2Market Economic Outlook.