Timber Investment and Price Drivers

The macro-economic outlook for timber and price drivers 

Construction provides the largest driver of demand for timber in the UK. The construction industry is dependent on economic growth, which in turn tends to be correlated with population growth. The UK population is expected to continue to grow through this century.

Conveniently, trees do not suddenly ripen and need to be harvested like other crops, which provides flexibility to seek strong prices in upward economic cycles. 

So what is the outlook?

The outlook therefore is that continued population growth and displacement of other high emission building materials by wood will drive growth in timber demand.

This growth in demand will be met by falling domestic supply and rising import prices, which should generate a trend of pushing the price of timber upwards, which feeds through into higher returns for forestry investors.