Japan Economy, Housing Starts & Lumber Shipments
Japan Economic Update
Japan’s third quarter GDP beat expectations by registering a 2.2% increase on an annualized basis. So far this year Japan’s GDP expanded 0.5% between January and March and 0.2% April to June. Although consumer spending remained flat, third quarter GDP growth was boosted by an increase in exports. Meanwhile, Japanese equities and the yen exchange rate abruptly reversed trends after the surprising results of the U.S. presidential elections. The Japanese yen registered gains and equities fell on the political uncertainty leading up to the elections. However, in a post-election environment the Japanese weakened from 102 yen to the dollar to 110 yen to the dollar. As a result the Nikkei 225 index surged from the low 16,000 level to over 18,000 in the past month.
Despite the results of the US election, the Japanese government continues to advocate implementation of the TPP agreement. Japan’s lower house passed the TPP in early November and ratification in the LDP majority upper house is merely a formality. Japanese officials also met with the 11 other TPP signatory nations in Lima, Peru to push for the formalization of the agreement. According to Japanese government estimates, the TPP would create 800,000 jobs and sustain GDP growth of 2.5%. Although the prospects for TPP remain uncertain given president elect Trump’s opposition, the Japanese government continues to advocate a pro-trade stance.
Japan Housing Starts Summary
August total housing starts increased 2.5% to 82,242 units. Single family owner occupied housing registered growth of 4.3% for the 7th consecutive monthly gain. Rental housing posted strong growth of 9.9%. However, the mansion condominium market declined 12.7%.
Total wooden housing increased by 7.9% to 48,717 units. Post and beam starts improved 7.6% to 36,470 units. Wooden pre-fab starts were down 12.3% to 1,143 units. Two by four starts posted an 11.7% gain to 11,104 units. By housing type 2×4 custom ordered single family homes increased 8.1% to 3,110 units; rentals surged 16.0% to 6,877 units and built for sale 2×4 spec housing declined 4.4% to 1,086 units.
BC Wood Exports Summary
As of the end of September, British Columbia year-to-date softwood lumber exports to Japan totaled 1,586,815m3: a decrease of 4.5% compared to year prior figures. By value year to date exports totaled $530.1 million – a decrease of 5.4%. By species groups, SPF shipments remained comparatively stable with a 0.1% decline to 1,150,578m3. In contrast, between January and September, Hemlock decreased 12.1% to 199,715m3, Douglas Fir fell 14.1% to 156,586m3 and Yellow Cedar fell 22.8% to 48,728m3.
Canadian Lumber School Symposium Held in Nagoya
On November 10th Canada Wood held our second Canadian Lumber School Symposium for the year in Nagoya. A total of 52 participants from forest product trading and distribution companies, housing companies and lumber processing end user companies attended. All attendees found the event to be either useful or very useful according to participant survey responses. Four presentations were delivered over a half day event covering topics such as sustainable Canadian forest practices, forest product manufacturing as well as species and product specific discussions on Canadian SPF, Hem Fir (N) and Coastal species as well as OSB. Participant survey responses included the following comments, “I was able to better understand about the history behind Canadian Wood and the changes in the Japanese market.” and “You conveyed the main points of Canadian Forestry in a very easy to understand manner”.