Sawmills and Wood Preservation
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 2,600 sawmills and wood preservation companies in the US produce and treat a variety of wood products, including structural elements and dimension lumber. Major revenue categories include softwood lumber, hardwood lumber, preserved wood products, and wood chips. Sawmills may provide wood preservation services as a final step of production. Some large companies are vertically-integrated and own timberland or downstream operations, including divisions involving real estate ownership and residential construction.
Sensitivity To Economy And Construction Activity
Demand for wood products is highly dependent on the health of the construction and household furniture industries, both of which are sensitive to economic conditions.
Variable Timber Costs And Supply
The cost and supply of timber can be volatile, and affect margins and profitability for sawmills and wood preservation services providers.
Industry size & Structure
The average sawmill and wood preservation firm operates out of a single location, employs about 35-36 workers, and generates $18 million annually.
- The sawmill and wood preservation industry consists of about 2,600 firms that employ 91,600 workers and generate $47.8 billion annually.
- Sawmills account for 90% of firms and 78% of industry revenue.
- The sawmill industry is fragmented; the top 50 companies account for 53% of industry revenue. The wood preservation industry is concentrated; the top 50 companies account for 85% of industry revenue.
- Large companies with sawmill operations include Weyerhauser Company and PotlatchDeltic Corporation. Large companies that provide wood preservation services include Koppers Holdings and the US operations of Canada-based Stella-Jones.
- Some large companies are vertically-integrated and own timberland or downstream operations, including divisions involving real estate ownership and residential construction.
Industry Forecast
Sawmills and Wood Preservation Industry Growth
Recent Developments
Mar 24, 2025 - Southern Yellow Pine Futures to Trade on Wall Street
- Exchange operator CME Group will begin trading in Southern yellow pine futures on March 31, 2025, according to The Wall Street Journal. The move comes as more sawmills migrate from Canada to the US to mitigate the effects of rising tariffs. Giving US-grown Southern lumber their own futures contracts will allow sawmills and other forest product industries to better manage their exposure to price fluctuations. Before the launch of Southern yellow pine futures (ticker: SYP), lumber futures excluded southern pine and were based on deliveries of Northern conifer boards, much of it Canadian spruce, pine, and fir. The new Southern yellow pine futures will be settled in cash, allowing speculators to trade without holding lumber inventories.
- Home builder confidence in the single-family market dropped in March 2025 amid mounting concerns about tariff threats, higher input costs, and economic uncertainty, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), dropped three points to 39 in March from 42 the previous month. Any HMI reading over 50 indicates that more builders see conditions as good than poor. While builders still face headwinds, including high materials costs being made worse by trade strife and labor and lot shortages, the industry is encouraged by the Trump administration’s emphasis on reducing regulations.
- Rising tariffs on Canadian lumber imports could prompt more of Canada’s sawmill operators to move some of their operations south of the border, according to Reuters. Tariffs on Canadian lumber could increase to 40% if the Trump administration’s proposed 25% tariff on Canadian imports goes into effect on top of existing levies of 14.5%. The administration has paused tariffs on goods that comply with the United Sates-Mexico-Canada Agreement until April 2. Canadian firms have decamped to the US South in recent years, attracted by the region’s abundant and inexpensive timber supplies on public lands. Much of Canada’s timberlands are owned by the federal government.
- A lack of affordability in the new single-family home market could reduce demand for lumber. In 2025, nearly 75% of US households are unable to afford a median-priced new home, according to the National Association of Home Builders. Given a median new home price of $459,826 and a 30-year mortgage rate of 6.5%, more than 100 million US households are priced out of the market. In 23 US states and Washington DC, more than 80% of households cannot afford a median-priced new home, suggesting a significant discrepancy between home prices and household incomes.
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