January-February 2016

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Page 32 of 51 PalletCentral • January-February 2016 31 Exchange Rates Europe, South America and Canada are major markets for U.S. manufactured goods, such as consumer products and business equipment. A movement of 38% in the Brazilian Real makes U.S. goods extremely expensive and will force potential purchasers in Brazil to look at alternative suppliers, such as Europe (off only 20%). Situation in Wood Products: Good for Pallet Producers The modest improvement in domestic markets and large declines in export sales pushed lumber (both softwood and hardwood) prices lower in 2015. The softwood lumber situation is pretty straight forward. First, housing starts continued their painfully slow recovery in 2015. Housing starts in November were running 15% above year ago levels with a very strong showing in multi-family units. Housing Starts The higher starts, coupled with some gains in industrial production and remodeling expenditure, boosted the demand for lumber in the U.S. and grew by 5.3%. Demand for lumber in Canada did not grow in 2015. Since pallets are used to move manufactured goods, this is THE part of the economy the pallet producers care about.

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