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palletcentral.com PalletCentral • May-June 2015 39 While domestic economic activity dominates U.S. forest product output, global markets are increasing in importance. Most notably, growth in manufacturing output in China has shifted paper and paperboard production toward Asia. "But there are many key unknowns" said Wear. While U.S. forest product outputs are dominated by domestic economic activity, the effect of trade is increasingly important. "Most notably, the growth in manufacturing output in China has shifted paper production toward Asia, where paper is needed for packaging in this growing manufacturing output. On the other hand, increased demand for wood to support Asia's paper and flourishing furniture industry could lead to rising demand for U.S. exports of pulp and hardwood logs to that region in the long run." While the United States has shown movement toward trade balance in several product categories, much of this is due to declines in exports to the U.S. from Canada. It is not clear, at this point, how the loss of timber inventory to mountain pine beetle is affecting that country's ability to compete against domestic U.S. production. Canada's timber supply situation will continue to have important implications for U.S. production. Wood products market futures over the next 10 years will depend not only on the level of housing demands but also on the composition of new housing (single versus multi-unit). The potential effects of altered income distribution on housing demand are unclear. Tightening resource supplies outside of the United States and especially in Asia might increase U.S. comparative advantage in the long run, based on its sustainable plantation production model. Although the report focuses largely on the demand side of U.S. forest products markets, especially as influenced by international markets for secondary products, the overall scale of U.S. production and national comparative advantage also depends on its timber supply. Overall timber supply in the United States has grown in the last several decades, reflecting a strong investment in private forests in the South. "The U.S. will continue to lead the world in production and consumption," said Wear. Understanding why the U.S. share of the global forest products market has changed, and how it might change in the future, is valuable to decision makers in both the public and private sectors who are interested in understanding these different factors and how present, and future policies, affect the forest products market, according to Wear. Copies of David Wear's slides shown during NWPCA's Annual Leadership Conference are available at PalletCentral.com>> Events>>Presentations. PC "Global Position of the U.S. Forest Products Industr y" A newly published report by U.S. Forest Service Southern Research Station (SRS) economists Jeff Prestemon, David Wear and SRS staff Michaela Foster, analyzes the underlying forces causing shifts in production and demand in different sectors of the domestic and international wood products markets, including developments in policies, programs, technologies, and consumer preferences. The full 24-page report is available as a free download at: www.srs.fs.usda.gov/pubs/gtr/gtr_srs204.pdf.