PCH - Stronger residential construction to bode well for lumber demand PotlatchDeltic CEO says

2023-06-06 09:26:34 ET

Residential construction in the U.S. is only going to get stronger from here and that would bode well for the lumber market, PotlatchDeltic ( NASDAQ: PCH ) CEO Eric Cremers said at the Nareit REITweek conference Tuesday. Residential construction (single and multifamily combined) represents ~35% of lumber demand, he added.

Housing in the U.S. has stayed "relatively stable," as people get used to historically high mortgage rates and the country is "way underbuilt" amid strong housing demand in the eyes of homebuilders, he said.

As such, Cremers contended that housing starts will bounce back to 1.6M by next year, compared with the 1.401M print in April.

In its first-quarter results published in April, Cremers said: "As we head into the spring building season we are encouraged by the recent upward trend in lumber prices and we continue to remain optimistic on long-term housing-related fundamentals that drive demand in our business."

Timberland has good cash flow metrics and it's selling at high values, he noted at the conference, adding that some 85% of PotlatchDeltic's ( PCH ) net asset value accounted for its timber holdings. PCH own almost 2.2M acres of timberlands.

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