Many people tend to recall that the Great Recession began with the collapse of the Lehman Brothers financial firm in September 2008. But those of us associated with the forest products industry, and especially you who walk up and down catwalks in sawmills every day, know better.
You’ll notice in this issue the results of our 2014 Softwood Sawmill Capital Expenditure Survey. If you read the results, you’ll definitely notice the optimism that softwood sawmillers have for the remainder of this year and next year. I mean we’re talking about nearly 90% of you rating your business situation as good or excellent for 2014-2015.
This prompted me to visit our humble library and pull out a similar survey we conducted in the spring of 2008. One question jumped out: How would you rate the lumber market situation of the past year? More than 65% of you said it was the worst you had seen. Another 15% of you said it was terrible, but you had seen worse. And 9% said it was pretty terrible. Only 11% of you said it was okay.
One lumberman stated of the recent year: “Catastrophic, bankrupting, bloodletting.”
That survey also asked you to rate the next couple of years. About 90% of you expected it to be bad or terrible. Show these numbers to any newcomers in your organization who weren’t around in 2008.
Another lumberman hit the nail on the head: “High foreclosures are putting more resales on the market than usual, which is reducing the demand for new starts.”
Frankly, the devastation in our industry back then caused us at the magazine to do two things: One, hold off a few years before we did the next survey. After all, we were all getting tired of reading about how bad it was. Two, we also quit producing our Top 200 Sawmill Producers list. Due to massive curtailments and cutbacks, the production numbers became almost embarrassing and didn’t really tell us anything we didn’t already know. Which was, our industry was in a heap of trouble.
We struck up the survey again 2011, not that things had improved much. In 2011, 32% of you rated your business situation as good or excellent, compared to 79% who did so in our current 2014 survey. Only 22% of you had produced at 90-100% of your capacity the previous year in 2012, compared to 51% who did so in 2013 according to our current survey.
In the 2011 survey, one lumberman commented, “Saying the situation is good is simply an act of faith, a hopeful outlook.”
To play this on out, in the 2012 survey, 33% of you said your business was good or excellent. But then in 2013 this number made the big leap to 73%, again compared to 79% this year.
In the 2013 survey, 79% of you expected good or excellent conditions for 2013 and 2014, compared to 88% in our current survey for 2014 and 2015.
Of course you can walk out of your office and observe the goings-on in your sawmill and realize how much better things are today than they were during that 2007-2012 period. But survey results such as these do serve to put some fairly definitive numbers on what you were going through back then and what your current status is.