Impact on Your Procurement Strategy

The current market presents a stark divergence between macro-economic headwinds and immediate price action. While Statistics Canada reports that forestry and logging activity has plunged to a record low following a 2.8% contraction in November, the scarcity of available wood has triggered an accelerating rally. Framing lumber prices have surged 8.8% over the last 21 days, a move that is largely ignoring the broader economic stagnation in Canada, where GDP remained flat and payroll employment dipped by 26,200 positions .

For US distributors, the primary risk is no longer demand destruction but rather supply-chain exhaustion. The fact that forestry output has declined for three consecutive months suggests that even a modest uptick in US spring buying will meet a severely depleted pipeline. Furthermore, US Producer Price Index (PPI) data shows a 0.5% increase in December, driven by services. This indicates that while goods prices are stabilizing, the cost of logistics and operations for distributors remains on an upward trajectory, further squeezing margins.

Inventory strategy should prioritize coverage over price-shopping in the near term. With price momentum firmly in an uptrend ( 11.8% above the 12-week moving average ) and volatility reaching 16.1% , the cost of waiting for a correction is high. The technical signal shows an RSI of 70, which typically suggests an overbought market; however, in a supply-driven squeeze, these levels can persist longer than macro data would suggest. We expect the current momentum to carry prices higher through the first half of February.

Geographically, buyers sourcing from Western Canada should expect the tightest conditions. With Canadian manufacturing employment down 0.3% and logging at all-time lows, the ramp-up time for mills to respond to price signals will be extended. Buyers should focus on securing SPF and framing packages now, as the current +8.8% momentum is likely to trigger a secondary wave of FOMO-based buying across the US distribution network.

Key Takeaways

• Secure SPF and framing lumber requirements for February immediately; supply-side contraction of 2.8% in Canadian forestry is driving a scarcity-led price rally.

• Expect 2.8% price growth by February 6; current momentum is strong enough to override the high RSI of 70 and flat macro-economic indicators.

• Monitor single-family inventory; with rental stock at record lows ( 31.0% ), owner-occupant demand for existing homes will continue to support renovation and repair spend.

Market Outlook

Pricing Trend: UP

Confidence Level: MEDIUM

Recommended Action: Lock in remaining February framing volume before the February 6 forecast target—expect a 2.8% price jump as record-low Canadian forestry output continues to starve the market of available supply.

How LumberFlow Helps

Utilize the weekly price forecast to quantify your exposure to the current 8.8% rally , then cross-reference with our daily market insights for real-time updates on mill curtailments. Within the LumberFlow procurement portal, buyers can use agentic sentiment tools to evaluate if current quotes reflect the tightening supply seen in recent GDP data.

Ready to stay ahead of market trends? Book a consultation with our team to see how LumberFlow's procurement platform transforms dimensional lumber buying.