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
Jan 24, 2025 - Residential Construction Loan Volumes Decline
- In the third quarter of 2024, the volume of outstanding residential acquisition, development, and construction (AD&C) loans made by FDIC-insured institutions declined for the third quarter in a row, according to the National Association of Home Builders (NAHB). The value of residential AD&C loans in Q3 2024 was $490.7 billion compared to $495.8 billion in Q2 2024. The volume of residential AD&C loans is expected to rise in 2025 as the Federal Reserve continues its monetary easing policies, but potential headwinds include the federal deficit and economic uncertainty.
- Home remodeling spending is expected to see slight gains in 2025 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase by 0.4% to $513 billion in the first quarter of 2025 compared to Q1 2024. In the second quarter of 2025, remodeling spending will rise quarter-over-quarter to $505 billion, up 0.7% from Q2 2024. Spending will then increase to $506 billion in Q3 2025, up 1.2% from Q3 2024. In the fourth quarter of 2025, year-over-year spending is forecast to rise 1.2% to $509 billion. Joint Center expects improvements to be supported by rising home values, a steady labor market, and gradually improving existing home sales. Better retail sales of building materials and solid remodeling permitting activity should also support home improvement spending.
- In the third week of January 2025, commodity prices for lumber were about $552 per thousand board feet - essentially unchanged from a month earlier, according to Trading Economics. Lumber prices were also flat on a year-over-year basis. Shortly after taking office, President Trump warned he would impose a 25% tariff on lumber imports from Canada beginning on February 1st, 2025. A higher tariff on Canadian lumber imports would push prices higher, which could reduce lumber demand as builders look to alternative materials. Canada is the largest foreign supplier of lumber to the US market.
- After posting solid gains in 2023 and 2024, construction spending for nonresidential buildings is expected to slow significantly in 2025 and 2026, according to the American Institute of Architects’ (AIA) Consensus Construction Forecast released in January. Total spending for nonresidential building construction increased by 20% in 2023 and another 6% in 2024 but is forecast to slip to 2.2% in 2025 and 2.6% in 2026. For the next two years, growth will be led by data centers, which should support modest office construction in an otherwise challenging market. The warehouse sector is oversupplied, which will limit spending growth. Spending on institutional projects should remain stable as they are less susceptible to cyclical factors. AIA Chief Economist Kermit Baker said, “The modest outlook is partly based on a few expected headwinds to building activity, including potential tariffs on imports. There is also policy concern around how the construction labor force might be impacted by emerging immigration policy. Construction sector spending has been exceedingly strong – albeit unusually unbalanced – and coupled with these headwinds the projections are only very modest gains the next two years.”
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.