Japan Economy, Housing & Lumber Shipments
The Bank of Japan (BOJ) lowered growth forecasts for the current fiscal year down from 1.5% to 1.1%. The BOJ forecasts economic growth of 1.5% in fiscal 2015. Encouraged by signs that they are on track to reach their target of 2% inflation within 2 years, the BOJ recently decided to maintain the current rate of quantitative easing. The bank predicts that consumer prices will increase 1.9% for this fiscal year and 2.1% in fiscal 2015. In April, Tokyo consumer prices jumped 2.7%, marking the highest increase in 22 years.
Consumer sales showed signs of weakening in April and the 3% increase of the consumption tax came into effect at the beginning of the month. National automobile sales fell 5.5% and sales of electronic goods fell approximately 10% according to a leading chain. Although a slowdown in sales is forecast over the next quarter, the decline is not expected to be as severe as when the consumption tax was last raised in 1997 which was followed by a 40% slump in retail sales. Gradual recovery is forecast for the second half of this year.
Japan Housing Starts Summary
For the first time in 19 months, Japan’s total housing starts fell 2.9% in March. Total starts finished at 69,411 units. Owner occupied starts fell by a more dramatic 13.0%. In contrast, rental apartments increased by 11.3% Total wooden starts fell 6.9%. Platform frame starts fell 8.3% to 8,612 units. Platform frame custom owner occupied homes fell 12.0%, rental apartments fell 4.3% and built for sale spec homes dropped 18.4%. It should be noted however that by historical standards starts were particularly strong in March of 2013: in other words March 2014 starts are still at the high end of seasonal 2×4 starts when we look back to historical averages.
Softwood Exports to Japan
The impact of the Vancouver trucker’s strike became manifest in SPF exports to Japan. Cumulative SPF exports for January-February finished at 216,239m3 or 20% lower than year prior results. As they were far less impacted by the truckers strike, Coastal species fared much better. Year to date exports of Hem Fir increased to 62,328m3 from 49,806m3 a year prior. Douglas Fir increased from 38,312m3 to 39,337m3 for the first two months of the year.