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Report from
North America
US government weighing 25% timber tariffs
The US is considering imposing a 25% tariff on
international timber and wood products beginning in
April, looking to add another item to an expanding list of
products under duties.
The president campaigned on reviving the US economy
and manufacturing by, in part, relying on tariffs. He has
acted on this since taking office despite some economists
warning that such decisions could spike the prices of
goods for Americans.A 25% tariff was imposed on goods
coming from Canada and Mexico, levies he postponed for
a month after speaking to the nations’ leadership and
increased attention to curb the influx of drugs over the
borders.The US government has indicated reciprocal
tariffs will be adjusted for every trading partner.
See: https://thehill.com/homenews/administration/5155132-
trump-lumber-wood-tariffs/
Higher interest rates - housing starts dropped in
January
Constrained housing affordability conditions due to
ongoing, elevated interest rates has led to a decline in
housing starts. Overall housing starts fell year on year by
almost 10% in January to a seasonally adjusted annual rate
of 1.37 million units, according to a report from the US
Department of Housing and Urban Development and the
US Census Bureau.
The January reading of 1.37 million starts is the number of
housing units builders would begin if development kept
this pace for the next 12 months. Within this overall
number, single-family starts decreased 8% to a 993,000
seasonally adjusted annual rate; the January pace was
around 2% lower than a year ago. The multifamily sector,
which includes apartment buildings and condos, decreased
13.5% to an annualized 373,000 pace.
“High construction costs, elevated mortgage rates and
challenging housing affordability are causing builders to
approach the market with caution said Carl Harris,
chairman of the National Association of Home Builders
(NAHB). He added “the uncertain policy environment in
terms of a better regulatory climate and impending tariffs
offers both upside and downside risks in the near-term.”
The single-family home market is facing competing
concerns and opportunities for 2025 said NAHB Chief
Economist, Robert Dietz. On a regional basis compared to
the previous month, combined single-family and
multifamily starts are 28% lower in the Northeast, 10%
lower in the Midwest, 23% lower in the South and 42%
higher in the West.
The number of single-family homes under construction in
January was down 6% from a year ago to 641,000 units.
The number of multifamily units under construction was
down 22% from a year ago, to 768,000 units.
Housing starts across Canada rose 3% in January
compared with December helped by strength in multi-unit
starts in Quebec and British Columbia. The increase came
as the annual pace of urban starts also rose 3% to 220,643
in January versus 215,052 in December.
The annual pace of multi-unit urban starts, such as
apartments, condominiums and townhouses, rose 8%.
CMHC Deputy Chief Economist, Tania Bourassa-Ochoa,
said "while these increases show early signs of progress to
begin the year foreign trade risks add significant
uncertainty for future housing construction," The agency
said its outlook was clouded by the threat of widespread
tariffs from the U.S.
See: https://www.census.gov/construction/nrc/current/index.html
and
https://www.msn.com/en-ca/money/topstories/housing-starts-up-
3-in-january-but-trade-risks-add-significant-uncertainty-cmhc/ar-
AA1zdenJ?ocid=BingNewsVerp
Existing home sales fell more than expected in
January
Sales of existing homes dropped more than expected in
January after three straight monthly increases as high
mortgage rates and rising house prices stifled demand.
Home sales decreased 5% in January to a seasonally
adjusted annual rate of 4.08 million units according to the
National Association of Realtors. While the figure was
2% above last January’s total, economists polled by
Reuters had forecasted home resales only slipping to a rate
of 4.12 million units.
The National Association of Realtors (NAR) report added
to a sharp decline in single-family housing starts last
month in suggesting that residential investment weakened
at the start of the first quarter after rebounding in the
October-December quarter.
Regionally, January sales in the Northeast fell 6% from
December to an annual rate of 500,000, up 4% from
January 2024. In the Midwest, sales were unchanged in
January at an annual rate of 1 million, up 5% from the
previous year. Existing-home sales in the South fell 6%
from December to an annual rate of 1.83 million in
January, identical to one year before. In the West, sales
slumped 7% in January to an annual rate of 750,000, up
slightly from a year ago.
See: https://www.nar.realtor/research-and-statistics/housing-
statistics/existing-home-sales
Builder confidence undermined
Builder sentiment fell sharply in February over concerns
on tariffs, elevated mortgage rates and high housing costs.
Builder confidence in the market for newly built single-
family homes was 42 in February, down five points from
January and the lowest level in five months according to
the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI).
While builders hold out hope for pro-development
policies, particularly for regulatory reform, policy
uncertainty and cost factors created a reset for 2025
expectations in the most recent HMI, said NAHB
Chairman, Carl Harris.
High interest rates are considered the most serious
challenge in 2025 by builders according to NAHB/HMI
surveys. The next four most serious issues builders faced
in 2024 were rising inflation (80%), buyers expecting
prices/interest rates to decline (77%), the cost/availability
of developed lots (63%) and the cost/availability of labour
(61%). Builders don’t expect much improvement in these
challenges in 2025, except for rising inflation, which
‘only’ 52% see as a serious problem in the year ahead.
See: https://www.nahb.org/news-and-economics/press-
releases/2025/02/builder-confidence-falls-on-tariff-and-housing-
cost-concerns
and
https://lbmjournal.com/builders-top-challenges-for-2025/
US growth slowed in final quarter 2024
US economic growth slowed in the fourth quarter as a
strike at Boeing depressed business investment in
equipment, but consumer spending increased at its fastest
pace in nearly two years, underscoring strong domestic
demand that probably keeps the Federal Reserve on a slow
interest rate cut path this year.
Gross domestic product increased at a 2.3% annualised
rate in the last quarter after accelerating at a 3.1% pace in
the July-September quarter the Commerce Department's
Bureau of Economic Analysis said in its advance GDP
estimate.
The moderation in growth in the final quarter of 2024
reported by the Commerce Department was also because
businesses struggled to keep up with the surge in demand,
partly driven by households preemptively buying goods
ahead of tariffs on imports that had been promised by the
government.
Year on year real GDP increased 2.8% in 2024, compared
with an increase of 2.9% in 2023.
See: https://www.bea.gov/news/2025/gross-domestic-product-
4th-quarter-and-year-2024-advance-estimate
US hiring slows in January
Hiring slowed in January with US employers added only
143,000 jobs amid the Los Angeles wildfires, frigid
weather across much of the nation and uncertainty
generated by the government’s trade and immigration
policies. Economists had forecast 170,000 jobs could be
added in January.
November's employment gains were revised up from
212,000 to 261,000 and December's from 256,000 to
307,000, booming additions that partly coincided with a
burst of small business optimism after the election in early
November. The furniture and home furnishing retailers’
sector gained more than 5,000 jobs in January while
employment showed little change over the month in major
industries including construction and manufacturing.
See: https://www.bls.gov/news.release/empsit.nr0.htm
and
https://www.msn.com/en-us/money/markets/us-jobs-report-
today-employers-added-143000-jobs-in-january-unemployment-
rate-at-4/ar-AA1yB8LP?ocid=BingNewsVerp
Consumer confidence slides on fears of tariff-induced
price hikes
US consumer confidence slid in February reflecting fears
that tariffs proposed by the government on imports will
lead to rising prices. The University of Michigan's index
of consumer sentiment tumbled to 64.7 at the end of
February, well below January's 71.7.
In particular, the survey's gauge for buying conditions for
durable goods, those meant to last five years or more,
slumped in large part due to fears that tariff-induced price
increases are imminent.
Weaker confidence was consistent across groups by age,
income and wealth. But, while sentiment fell for both
Democrats and independents, it was unchanged for
Republicans reflecting continued divergence on the
consequences of the government's economic policies.
See: http://www.sca.isr.umich.edu/
and
https://www.wsj.com/economy/u-s-consumer-confidence-falls-
back-on-fears-of-tariff-induced-price-increases-
3ba5693d?mod=WTRN_pos1&cx_testId=3&cx_testVariant=cx_
160&cx_artPos=0
Manufacturing expanded in January ending 26-month
losing streak
Economic activity in the manufacturing sector expanded in
January after 26 consecutive months of contraction say the
nation's supply executives in the latest Manufacturing ISM
Report On Business.
The ISM said its manufacturing PMI rose to 50.9 in
January from 49.2 in December, with a reading above 50
indicating growth. Economists had expected the index to
inch up to 49.8. "The PMI has increased for three
consecutive months, with the most recent bump finally
returning the manufacturing sector to expansion," said
Timothy R. Fiore, Chair of the ISM Manufacturing
Business Survey Committee.
The bigger than expected increase in the headline index
partly reflected faster growth by new orders, as the new
orders index climbed to 55.1 in January from 52.1 in
December.
The report also showed a turnaround in production, with
the production index rising to 52.5 in January from 49.9 in
December, indicating growth after eight months of
contraction. The employment index also jumped to 50.3 in
January from 45.4 in December, returning to expansion
after contracting in 14 of the last 16 months.
Of the 16 industry categories surveyed by ISM, eight
reported expansion and eight reported contraction in
January. Both the Wood Products industry and the
Furniture & Related Products industry reported
contraction for the month.
See: https://www.ismworld.org/supply-management-news-
and-reports/reports/ism-report-on-business/
and
https://www.nasdaq.com/articles/us-manufacturing-index-
indicates-growth-first-time-over-two-years
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