R E S O U R C E S  -  F O R E S T R Y

Context

Forestry is a major economic presence throughout Canada, and the life-blood of numerous regions and communities. And despite recent trade-related issues that are affecting the sub-sector, world-wide demand for forest products is expected to over-shadow these shorter term factors. However, productivity challenges and tight environmental regulations will continue to affect the sector’s competitiveness.

Drivers

Forestry products from Canada are used world-wide, but no more so than in the U.S. And while the current trade dispute affects exports, it remains our major market. The housing boom of the past few years has increased demand for softwood. That is expected to slow over the next few years, but still remain a strong economic activity. Exports to Asia, as their economies grow, are expected to exhibit strong growth and counteract some of the cyclicality in the sub-sector.

Outlook

The sector is in a depressed state at this time. Resolution of the trade dispute and gaining access to emerging markets in Asia are the key factors in restoring health. Both of these are expected to occur in the near term, reviving the fortunes of the sector through the rest of the decade. Equally, the export of newsprint, while highly competitive, is expected to maintain its role in the sector.

Changing Client Needs

While the Canadian forest products industry is part of a global network, our operations are highly influenced by local factors: environmental regulations, labour productivity, energy cost and transportation. Clients are therefore increasingly attentive to process optimization and pollution control, areas in which Dillon excels.