Forest sector beaming over lumber prices

Following a severe three-year slump, the Okanagan forest industry hopes the worst is finally behind it.

Lumber prices have surged to their highest level since 2006.

Some analysts have described the last few years as the forest industry's "nuclear winter": mills were shut down, thousands of workers were laid off, and companies lost hundreds of millions of dollars.

Now the industry, buoyed by strong lumber prices and increased demand, is starting to re-hire workers and expand production.

Nick Arkle, of Gorman Brothers Lumber in West Kelowna, says "We're certainly more optimistic than we have been over the last few years. There's a number of signs that indicate we've hit the bottom and we're coming out of it."

Not only is the American home construction industry improving, but exports of BC wood to China have been steadily increasing

There are concerns the worldwide demand for lumber may outstrip supply over the next few years.

Not only is demand rising, but the mountain pine beetle has severely reduced supply in BC and parts of the Western US.

Arkle describes the pine beetle infestation as a catastrophe for BC.

“There is every indication there will be a shortage of lumber in the future, which can only be good for prices,” he says.

Although the province's forest industry is on the road to profitability most companies don't expect a full recovery until 2011 or 2012.