Replies to post #8329 on The Rising Influence of Rising Affluence

[DewDiligence]

PCL headroom from the recovery in US housing starts:



http://www.nytimes.com/2014/04/27/upshot/the-housing-market-is-still-holding-back-the-economy-heres-why.html

The number of new houses and apartments that are needed in the United States is determined over the long term largely by demographics—immigrants arriving and young people moving away from home. From 2000 to 2007, the number of households rose 1.24 million a year on average—about what economists would expect, given those demographic trends.

Add in the 300,000 or so homes that fall into disrepair each year and need to be replaced, and builders would have to construct around 1.5 million homes a year to keep up with the longer-term demand.

As the chart above shows, US housing starts have recovered nicely from the depths of the last recession, but they are still about 40% below the long-term trendline dictated by demographics. As the US housing recovery continues to gradually gain steam, annual housing starts will gradually regress to the long-term trendline, which implies more demand and better pricing for PCL’s timber.

[DewDiligence]

Excellent 30-minute webcast by PCL at Raymond James/NAREIT conference (6/2/14):

http://reitstream.com/reitweek2014/plum-creek-timber-company-inc

Slide deck (37 pages):
http://reitstream.com/images/uploads/2014_REITWeek_2014.pdf