Abstract

Cyclical patterns in business activity are a common feature of industry in market economies. This study identifies and describes industry cycles in the US softwood lumber industry from 1985 to 2010. Statistical decomposition and filtering procedures are applied to time series data on sales volumes to extract the cyclical component, and nonparametric techniques are used to date the industry cycles. The study identifies four softwood lumber industry cycles: three coincident with business cycles and one attributable to developments in the US–Canada softwood lumber trade dispute. Softwood lumber industry cycle durations ranged between 5 and 6 years. Decline in seasonally adjusted softwood lumber industry business activity caused by cyclic contractions averaged 13 percent for the period under study, with the most recent contraction (January 2006 to March 2009) contributing a 22 percent decline in business activity.

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