COVID-19 and Forest Products

Abstract

Analysis of the pandemic's effect on the forest products sector, including lumber pricing and demand, reduction of labor is presented. The combination of labor supply contraction and higher product demand produced a set of repeated bidding wars for wood products that has endured throughout the pandemic, driving prices higher still. Economic research suggests that producers are able to adjust labor, capital and raw material input allocations in response to altered market conditions over the course of many months to years. Therefore, the short-run behavior in markets, demonstrating limited output adjustments, seen in this light, is not surprising.