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Boise Cascade sees less demand as housing starts fall Monday Oct 24, 2016 at 3:43 PM Oct 24, 2016 at 3:43 PM Greg Stiles Mail Tribune @GregMTBusiness Fewer multiple-family housing starts have created less demand for Boise Cascade's plants around the country, and expectations for the fourth quarter aren't any better. Although the Boise, Idaho-based wood products firm Monday reported third quarter net income of  $10 million, or 26 cents per share, on sales of $1.1 billion, the lack of new starts bit into the bottom line. "Our third quarter results in Wood Products were disappointing, while many of the elements impacting profitability in the business were driven by commodity pricing for oriented strand board volume," said Boise Cascade CEO Tom Corrick. "OSB and plywood volume was still a weaker result than we would expect to deliver at this point in the housing recovery." Total housing starts fell 2 percent from a year ago as multi-family starts declined 9 percent. Single-family starts increased 2 percent and are up 9 percent during 2016. The October consensus estimate for 2016 U.S. housing starts has declined modestly to 1.18 million starts. Corrick said Boise is optimistic for a bounce next year. "We believe the housing recovery will continue in 2017, but the decline in pace of the recovery is something we are watching closely," he said. "We continue to believe that demographics in the U.S. will support a return to normalized housing starts of 1.4 to 1.5 million starts. Corrick told analysts on a conference call plants throughout the industry are running well off capacity, primarily because of import competition. "The industry, I think, is probably running at about the mid-80s in North America, down from the low 90s, principally because of imports out of South America," he said. "In terms of our capacity utilization, we have taken a modest amount of downtime through the system, but most of it has been redirecting traffic of the veneer into our engineered wood. So, we're still running our facilities fairly full at this point. At this point, we don't have any plan of currently curtailing any facilities. That should keep the firm's plywood plants in Medford and White City and an engineered wood products mill in White City busy. "They're such an integral part of our engineered wood products business that they would be very low on a curtailment list," Boise Cascade spokesman John Sahlberg said. Corrick said 20 to 25 percent of plywood production is used for new residential construction, but imports created both more supply and lower prices late in the summer. "If you look at the total consumption data for wood products across the industry, plywood demand is actually OK," he said. "But we've been trying to reduce volumes, particularly in light of the imports, and trying to make sure that we focus our veneer where we've got positive contribution and redirect more of that internally toward (engineered wood) production." — Reach reporter Greg Stiles at 541-776-4463 or [email protected]. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31.