The U.S. economy appears to have turned an important corner – enough positive signals have emerged to give the average consumer a sense of optimism. That optimism will be the fuel for a sustained recovery and is welcome news.
The Thomson-Reuters/University of Michigan final-December Consumer Sentiment Index rose to 82.5 – a five-month high. The Expectations Index was up 13% and the Current Conditions Index was up 13.3% from last December. Personal finances improved among all households in the recent survey.
Year-end investment statements arrived in the mail boasting significant annual returns. The Dow and S&P 500 soared in 2013, posting the biggest annual gains since the late 1990s. The Dow was up 26% and the S&P 500 gained more than 29%. The Nasdaq surged nearly 40%, to highs not seen since 2000. The wealth effect created by these yields may be just the thing to persuade a consumer to go forward on a home remodeling project
Homebuilding is back on track with expected new home starts in 2013 to total 900,000 and predictions of 1.1 million new home starts in 2014. An 18% increase. In addition, I have been hearing from my counterparts in the marine and RV industries that consumer show attendance is up by as much as 25%.
These are encouraging signals that bode well for the wood products industry. Are you poised to take advantage of it? Being prepared to create new market opportunities during this recovery period will be the recipe for success.
At the IWPA Convention – March 5-7, 2014 in St. Petersburg, Florida – we will hear from Dusty McCoy, CEO of Brunswick Corporation (Stock Symbol: BC) to get a full picture of global consumer demand for its marine engines, boats, fitness, billiards and bowling products. Mr. McCoy was masterful in leading Brunswick through the recession and is always an engaging speaker. In addition, Scott Clemons, Chief Investment Strategist, Brown Brothers Harriman & Co., and a frequent contributor on financial news networks such as Bloomberg, WSJ, and CNBC will provide an overview of the economic trends and market intelligence important to the wood industry. I welcome you to join us and learn more about this recovery and how to capitalize on it. There is still time to register at www.iwpawood.org.
The economy hasn’t been the only thing the industry has been discussing. The U.S. Department of Agriculture (USDA) extended the deadline for public comments on the Hardwood Check off Program to Feb. 14. The proposed program would impose a mandatory industry assessment on hardwood and plywood produced the U.S. The collected funds would be used for research and to promote U.S. hardwood products. Check off supporters and opponents have competing websites to explain their viewpoints. Over 700 public comments have been sent to USDA – likely to be many more by the time the comment period closes. A look at the docket quickly reveals that feelings run strong in support and opposition to the proposal. IWPA filed comments noting that while imports are not supposed to be covered by the program, the exclusion needs to be made clear to avoid mandatory assessments on imported wood. Proponents have said they intend to promote only U.S. hardwood with the expected $12 million in annual revenue.
The next step is for USDA to consider all the comments received, finalize the proposed program and conduct a referendum. If it passes, the assessments will be mandatory.
I hope to see you in St. Petersburg where we will be discussing this and many other issues of interest to wood importers.
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