The Japan Wood Research Society held its 67th annual meeting from March 17th to 19th in Fukuoka City, Kyushu. On the 18th, the Society presented an award to Frank Lam and Yuan Li from University of British Columbia, Vancouver, BC. The award was presented for the article “Low cycle fatigue tests and damage accumulation models on the rolling shear strength of cross-laminated timber” that Dr. Lam and Dr. Li wrote for the Journal of Wood Science, one of the Journals published by the Society. The Society gives awards to superior research works on wood sciences and technologies. This year, 15 researchers earned the awards. Among them, UBC was the only overseas recipient. COFI participated in this AGM, where the outcome of FY2016 Canada Wood market access projects were orally presented. Okabe-san of Centre for Better Living made the presentation on Midply buckling properties. Shawn Lawlor and Hidehiko Fumoto were the part of the abstract co-authors. The Japan Wood Research Society was founded in 1955 and has about 2400 members including more than 100 from overseas.
The Japan 2×4 Lumber JAS Council held its 29th lumber grading championship on March 10th. This year, the venue was Osaka City Central Public Hall, a historical archive building designated as a National Important Cultural Property. A total of 31 graders from across the country competed with each other. All lumber samples were of Canadian dimension lumber. The “COFI Award” was given to the top three winners. The championship was followed by the annual meeting of the Council, the award ceremony and the reception, which hosted 129 guests. The first winner of the championship, Morita-san, will be invited to BC Interior Lumber Grading Championship in 2018, when COFI Kelowna office is celebrating its 50th anniversary.
On March 10th the JAS Lumber Council held its 29th grading competition at the Citizen’s Hall in Osaka. Canada Wood was on hand to present the COFI Award to three grade championship finalists. Shawn Lawlor presented the top COFI Award to Mr. Kazutomo Morita of Mitsui Home Components. An additional 2 other COFI Awards were presented to Mr. Takashi Matsuura and Mr. Kazuma Nakashima from Taihei Housing Corporation. The grading competitions are held by the JAS Lumber Council every two years in an effort to motivate plant quality control staff to hone their skills. The Council is planning to send a delegation of select JAS grading competition participants to Kelowna B.C. in May 2018 to attend COFI’s 50th Anniversary Grading Competition.
Japan Economic Update
Japan’s economy grew by 1% in 2016, posting 4 straight quarters of positive gains. This compares with a 1.2% GDP rise in 2015. The gain was primarily because of increased external demand for exports. Aided by a weakening yen, exports in 2016 increased by 2.6% thanks to recovering conditions in China and the United States. Despite efforts to re-start Japan’s domestic economy, overall consumer spending, which represents 60% of the overall economy, remained sluggish.
December Housing Starts Summary
December housing starts increased 3.9% to 78,406 units. For the first time in several months owner occupied single family housing led the gains with a 6.5% increase compared to a 2.2% rise in rental units. The mansion condominium market gained 10.7%.
December total wooden starts improved 6.6% to 45,974 units. Post and beam housing increased 4.9% to 34,572 units. Pre-fab wooden starts fell 4.5% to 1,109 units and total pre-fab fell 4.1% to 12,179 units. Platform frame construction gained 13.9% to 10,293 units. Two by four starts broke down as follows: custom ordered single family units rose 11.9% to 2,716 units; rentals gained 16.8% to 6,422 units and built for sale speculative housing increased 1.6% to 1,122 units.
2016 Year End Japan Housing Starts: The Year in Review
In 2016, record low lending rates combined with a postponed consumption tax hike helped propel Japan’s housing market to its strongest showing since 2013. Annual housing starts closed off 2016 at 967,705 units. The results represent a 6.4% increase over 2015. Wooden housing was particularly strong, with an 8.3% increase to 546,336 units.
Although certain housing market analysts, citing demographic headwinds and anemic growth, had forecast doom and gloom ahead for Japan’s builders, 2016 gives us pause to think that it is rather the resiliency of wooden housing which is noteworthy. As a percentage of all housing, wooden construction held a 56.5% market share – the second highest ranking in over 30 years. And at the mid-550,000 range, wooden starts in 2016 attained their second highest level in the past 16 years.
By wooden housing types fortunes vary. Post & Beam clocked the strongest growth of 8.9% to finish at 408,632 units. However, average post & beam floor area advanced at a slower 6.2% rate indicating shrinking average floor area per P&B unit. Shrinking average floor area is also a trend evident in platform frame housing. While 2×4 starts increased 7.9% in 2016, growth in floor area trailed at 4.4%. What’s behind the shrinking footprint? Over the past year rental housing has consistently outperformed single family housing thus skewing the overall floor average – as the typical rental units typically represent about just over half the floor area of a single-family owner occupied unit.
Platform frame construction achieved a new high in 2016, registering 123,713 units. This represents a 7.9% increase over year prior results. The composition of 2×4 starts reflects stronger relative growth in multi-family rentals – which advanced 11.7% to 77,114 units. Owner occupied single family homes edged up 1.1% to 32,305 units. Built for sale single family spec housing improved 3.0% to 13,795 units. As a percentage of overall starts, 2×4 saw a modest but steady market share increase to 12.8%.
Pre-fab housing trailed the pack with total results up 3.5% to 148,528 units. Within this group wooden pre-fab fell 2.5% to 13,991 units; reinforced steel & concrete fell 8.8% to 3,886 units; and steel frame increased 4.6% to 130,651 units. Most industry watchers expect that current market conditions will continue into 2017.
BC Wood Exports Summary
December 2016 year end British Columbia softwood lumber exports to Japan totaled 2,155,600m3: a decrease of 4.4% compared to year prior figures. By value 2016 exports totaled $725.7 million – a decrease of 4.4%. By species groups, SPF shipments dropped 0.7% to 1,564,202m3; Hem Fir shipments fell 14.1% to 267,444m3; Douglas Fir fell 10% to 210,886m3 and Yellow Cedar fell 17.6% to 67,944m3.
The Japan Tourism Agency reported the estimated number of hotel stays by visitors to Japan hit 70.88 million in March, 2017. This represents an 8 percent increase from the previous period and a new record for overseas travelers hanging their hats at hotels in Japan. Currently, foreign visitors account for 14.3 percent of the total 494.18 million hotel stays reported for the period, which also takes into account of the number of Japanese guests staying at hotels. The growth in the number of visitors staying at hotels in this country can be attributed to the great success that the Japanese government is having in attracting overseas travelers to spend time here, which saw 24 million tourist visit Japan in 2016, also a new record for the country. In addition, the agency reported a favourable trend, and what I think is very good news for our industry, that hotel stays in places outside the three major metropolitan areas of Tokyo, Osaka and Nagoya increase by 13.2 percent, which clearly outstripped the 4.8 percent increase that was realized for these three metro areas. This will certainly increase the demand for lodging in the local regions of Japan, where land prices tend to be cheaper, making the building of low and medium-rise wooden hotels and resorts more competitive, compared to the way most of these buildings are currently being constructed in this country.