The United States has a “structural deficit” in lumber and will lean on softwood imports years after Trump’s presidency, irrespective of global tariffs or presidential orders to “free up forests for lumber production.”
That is, according to a new report, which reveals that even if the United States stopped exporting lumber abroad, it would still have a 7 per cent gap between supply and demand. As it stands, the United States accounts for 27 per cent of softwood lumber demand, according to the O’Kelly Acumen and Global Wood Trends report, but produces only about 20 per cent of global supply.
That gap, the authors write, has been filled by imports for decades: over the past 50 years, foreign shipments have supplied between roughly one‑quarter and one‑third of total U.S. consumption. Canada provides the bulk of those imports — approximately 80 per cent — and is projected to meet more than 22 per cent of the U.S.’s needs in 2025. When growing shipments from Europe are factored in, nearly 30 per cent of U.S. requirements will be met by foreign producers.
Closing that capacity gap is an enormous undertaking.
Last month, Wood Central reported that the latest round of tariffs, which took effect on October 16, has already affected roughly 30 per cent of the structural lumber used to build housing across the United States. A Fastmarkets analysis revealed that the U.S. Forest Service and the Bureau of Land Management would need to increase timber harvests dramatically — by as much as 450 per cent — to cover shortfalls in Canadian plywood, OSB, and softwood lumber that are integral to single- and multi-family construction.
The real issue, the O’Kelly Acumen and Global Wood report reveals, is scale: replacing 25 million cubic metres of imported lumber would require construction of 75 new state‑of‑the‑art softwood sawmills — a build‑out that would demand capital investment more than twelve times the total U.S. sawmill investment of the past 15 years and would take over a decade to complete even under ideal conditions.
And the constraints are not just financial. The report highlights limited timber availability across several regions, shortages of skilled labour, and delays in permitting and infrastructure as key barriers to rapid expansion. While sawmill investment is rising in the U.S. South because timber supply and delivered costs are comparatively favourable, the study expects national capacity growth to remain slow through 2025–2027.
Lumber demand also remains uncertain following a sharp contraction in 2022, with high interest rates and housing affordability pressures continuing to weigh on consumption. The report projects that a long-term housing deficit will support renewed growth in housing starts from 2027 to 2030, lifting lumber demand in the latter half of the decade, even as near-term volumes remain fragile.
The authors warn that policy responses, such as tariffs or orders to increase federal-land harvesting, can shift trade flows and production incentives, but they cannot substitute for the time, capital, and workforce required to rebuild domestic capacity at scale. “Any meaningful move toward self‑sufficiency,” the report says, “would require a coordinated programme of mill investment, logistics upgrades and workforce development sustained over many years.”
Regionally, the outlook is uneven. The U.S. South is likely to attract most incremental investment due to its abundant timber and lower delivered costs, while the West and Northeast face steeper barriers, including constrained timber supplies, longer haul distances, and more complex permit regimes. Those differences are likely to exacerbate regional price divergences and logistics bottlenecks, even as aggregate capacity increases.
Why lumber capacity matters for housing capacity
In March, Wood Central reported that major curtailments to sawmills in the United States and across Canada had already reduced North America’s softwood lumber capacity by 3.1 billion board feet. To address the shortfall, the powerful National Association of Home Builders (NAHB) suggested that reducing tariffs on Canadian lumber, increasing local production, and curtailing exports of hardwoods and softwoods to China are key to managing building costs.
“In addition to the narrowly defined framing lumber, products such as plywood, OSB, particleboard, fibreboard, shakes, and shingles make up a considerable portion of the total material cost of a new home,” according to the NAHB’s latest report on Framing Lumber prices: “Surveys conducted by Home Innovation Research Labs show that the average single-family home uses 2,200 square feet of softwood plywood and 6,800 square feet of OSB, in addition to roughly 15,000 board feet of framing lumber. “
Then, there are inputs into cabinets, windows, doors, and trusses: “To account for the manufacturer’s margins, sawmill prices for the lumber embodied in these products are marked up by the percentage difference between receipts and cost of goods in the ‘wood product manufacturing’ industry,” the NAHB said. “The bottom line is that changes in softwood lumber directly impact the price of a new home. This, along with the rising wages for construction workers and higher interest rates, is one of the reasons why the housing market is experiencing declining affordability.”
- To read more about the impact of building materials on the cost of a new home, click here for Wood Central’s special feature from last month.
