A Resurgence After Nine Quarters of Decline

For the first time in over three years, North American structural panel manufacturers reported a year-on-year increase in production between July and September 2024. This significant milestone, revealed by APA—The Engineered Wood Association, marks the first positive growth since the second quarter of 2021. That previous uptick had seen a sharp 13% rise in total OSB (oriented strand board) and softwood plywood production, reaching 7.844 million cubic meters (m³).

However, the North American structural panel industry faced a challenging period after mid-2021. Production declines persisted for nine consecutive quarters, with some of the most severe drops occurring in late 2022 and early 2023. By the fourth quarter of 2022, the industry saw a dramatic 6% decrease, bringing total output down to 7.010 million m³. A similar 6% drop followed in the first quarter of 2023, with production hitting 7.138 million m³.

Third Quarter 2024: A Promising Recovery

After this prolonged downturn, structural panel output stabilized in 2024, eventually leading to the long-awaited growth reported in the third quarter. Production volumes reached 7.165 million m³ during this period, representing a notable improvement compared to the same quarter the previous year. Analysts attribute this recovery to stabilizing demand in residential construction and better pricing dynamics in the wood market.

Notably, OSB production displayed consistent dominance over softwood plywood output in many of the quarters during the downturn. This trend was particularly evident between the second quarter of 2021 and the third quarter of 2023. However, softwood plywood production gained momentum in late 2023, outperforming OSB in all four quarters of that year—a reversal that continued into early 2024.

OSB vs. Softwood Plywood Trends

While OSB production typically exceeds that of softwood plywood, both segments have faced their own challenges over the past few years. OSB output hit a low point of 4.839 million m³ in the fourth quarter of 2023, while softwood plywood production struggled the most in late 2022. Despite these setbacks, softwood plywood saw relative gains last year, thanks in part to targeted demand in industrial and specialty applications.

The most recent data suggests that the balance between the two segments may be gradually normalizing. Both products are critical to structural applications, particularly in residential and commercial construction. Their stable and improved production capacities translate to a more reliable supply chain for builders and traders alike.

Industry Perspective and Outlook

The rebound in structural panel production is a positive signal for the North American wood industry, which has grappled with both post-pandemic market fluctuations and evolving consumer demand. Manufacturers will likely keep a close eye on broader economic factors, including interest rates and housing market activity, as they plan production strategies for 2025.

This resurgence also highlights the adaptability and resilience of panel producers, who have weathered significant volatility over the past three years. As the industry continues to recover, the focus will remain on achieving balance between supply and demand to maintain sustainable growth in the years ahead.