Mobile Menu

Business Environment Profiles - Canada

Price of wood products

Published: 19 July 2024

Key Metrics

Price of wood products

Total (2025)

167 Index

Annualized Growth 2020-25

7.3 %

Definition of Price of wood products

The price of wood products represents the price of all timber and forestry product inputs in Canada, including logs and bolts, pulpwood and rough, untreated poles, posts and piling. Both hardwood and softwood varieties are included. Data is sourced from Statistics Canada's Raw Materials Price Index and is presented as an index with 2010 as the base year. Forecasts are sourced from Agriculture and Agri-food Canada.

Analyze the wider world in which businesses operate

We measure the upstream and downstream ramifications on thousands of industries so businesses can monitor their external operating environment. Explore membership options today.

Purchase options

Included in an IBISWorld Membership

Our industry reports include 35+ pages of data, analysis and charts, including:

  • Industry Financial Ratios
    Industry Financial Ratios
  • Historical and Forecast Growth
    Historical and Forecast Growth
  • Industry Market Size
    Industry Market Size
  • Industry Major Players
    Industry Major Players
  • Profitability Analysis
    Profitability Analysis
  • SWOT Analysis
    SWOT Analysis
  • Industry Trends
    Industry Trends
  • Industry Operating Conditions
    Industry Operating Conditions

Recent Trends – Price of wood products

Generally, the price of wood products has a low level of volatility as wood products are widely available in Canada, keeping supply relatively steady. As a result, demand drives price changes. Specifically, the price of wood products is determined by demand for lumber inputs, which are driven by three key subsectors that include solid wood product manufacturing, pulp and paper product manufacturing and forestry and logging. According to data from Natural Resources Canada, solid wood product manufacturing accounts for 44.0% of the forest sector's contribution to the Canadian economy. Of this, the pulp and paper product manufacturing subsector account for 36.0% and forestry and logging accounts for 20.0% of the forest sector's contribution to the nation's economy.

Over the past five years, construction markets in North America have rebounded from decade lows, increasing demand for lumber and thereby putting upward pressure on wood prices. Over the past five years, growing construction activity in China has also significantly increased North American exports to that country, contributing to price growth. This growth in construction activity in China and other Asian regions has helped expand Canadian timber exports. According to data from Natural Resources Canada, an estimated 20.0% of forest product exports are from softwood lumber, which is necessary for new construction.

Furthermore, lumber producers and other forestry sectors have experienced changes in their trade relations with the United States over the past five years. In 2017, the United States imposed tariffs on Canadian lumber shipments into the United States. These import duties increased uncertainty on demand and the price of wood during the latter half of the period. Furthermore, a decline in demand from crucial construction markets at the end of the period, particularly amid the COVID-19 pandemic in 2020, led to decline in price. However, a sudden rebound in construction activity in Canada and in the United States, while lumber supply has been limited, has led to a surge in prices in 2021.

But with the onsetting mounting of inflationary pressures stemming from an accelerated pace of the economy reopening, 2022 remained a challenging year for wood product prices as the operating costs of many industries skyrocketed from energy to many essential inputs. Concurrent hikes in interest rates have also played a role against more growth in the period, as this entails higher costs for operating larger projects while taking on more risk from those needing to borrow money to finance such projects. In turn, wood prices elevated at a higher rate in 2022 in response to these costly factors. Even as these factors have remained through the end of the period, as the current rate of consumer activity has remained buoyed in the period despite rising prices, inflationary trends, which fade over time, are set to mellow out more in the year, which will help boost some levels of activity and need for wood products for critical projects and other end processes. However, elevated interest rates will keep larger projects tempered in the period as this increases the cost of borrowing, leaving those needing more capital to finance such endeavors to take on more risk. In turn, prices for wood products are set to increase an annualized 7.3% over the five years to 2025.

Show more

5-Year Outlook – Price of wood products

Recovering construction markets, particularly from the US market, are expected to support demand ...

Looking for IBISWorld Industry Reports?

Gain strategic insight and analysis on thousands of industries.

Trusted by More Than 10,000 Clients Around the World

  • IBISWorld client - VISA
  • IBISWorld client - ADP
  • IBISWorld client - Deloitte
  • IBISWorld client - AMEX
  • IBISWorld client - Bank of Montreal