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Thanks to an improving housing construction climate, Canada's wood product industry is expected to increase in production by almost 10 per cent this year.

A report by the Conference Board of Canada (CBoC) shows the wood product industry is expected to increase in production by almost 10 per cent in 2010, after a rough year.

The industry lost more than $250 million in 2009, but due to improving housing starts, the demand for wood products is expected to rise. With cost-cutting measures being implemented this year, wood producers are expected to see a profit of more than $660 million.

Wood producers also no longer have to pay taxes for production inputs (e.g. equipment and materials) under the harmonized sales tax (HST) in Ontario and British Columbia. This will reduce industry costs, allowing them to invest in new technologies.

The global output of wood plastic composite (WPC) products is also continuing to grow. It currently exceeds 1.5 million tons per year, with North America being the largest market, accounting for about 1 million tons.