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Mapping the World’s Youngest and Oldest Countries

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Mapping the World’s Youngest and Oldest Countries

Country age demographics are determined by two key factors: fertility and mortality.

Throughout history, it was typical to see both birth and death rates at higher levels. But today, in most parts of the world, women are having fewer children, and innovations in healthcare and technology mean we are all living longer. The average person today lives to 72.6 years old, while the rate of births per woman has fallen to 2.5.

These trends have drastically altered the demographics of mature economies, resulting in a much older population. In many developing countries, however, births still outweigh deaths, resulting in populations that skew younger.

This visualization uses data from the World Bank to examine the countries with the highest shares of old and young people.

The Fountain of Youth

By 2030, the United Nations estimates there will be 1.3 billion people on the planet between the ages of 15-24. Proving to be a fountain of youth globally, the continent of Africa boasts the top 10 countries with the largest shares of young people in the world.

Somalia, Zambia, and the DRC are just a few to crack the top 10 list. The youngest country in the world is Niger, where almost 50% of the population is below the age of 15.

Here’s a full list of global countries, sorted by percentage of population under 15 years old:

CountryShare of Population Younger Than 15 (% of total, 2019)
🇳🇪 Niger49.8%
🇲🇱 Mali47.3%
🇹🇩 Chad46.8%
🇦🇴 Angola46.6%
🇺🇬 Uganda46.5%
🇸🇴 Somalia46.4%
🇨🇩 Congo, Dem. Rep.46.0%
🇧🇮 Burundi45.4%
🇧🇫 Burkina Faso44.7%
🇿🇲 Zambia44.5%
🇲🇿 Mozambique44.4%
🇬🇲 The Gambia44.1%
🇹🇿 Tanzania43.8%
🇳🇬 Nigeria43.7%
🇲🇼 Malawi43.5%
🇬🇳 Guinea43.4%
🇸🇳 Senegal42.8%
🇦🇫 Afghanistan42.5%
🇨🇲 Cameroon42.4%
🇧🇯 Benin42.2%
🇬🇼 Guinea-Bissau42.2%
🇿🇼 Zimbabwe42.2%
🇸🇹 Sao Tome and Principe42.1%
🇨🇮 Cote d'Ivoire41.7%
🇸🇸 South Sudan41.6%
🇨🇬 Congo41.5%
🇹🇬 Togo41.0%
🇱🇷 Liberia40.8%
🇸🇱 Sierra Leone40.7%
🇲🇬 Madagascar40.4%
🇪🇹 Ethiopia40.3%
🇸🇩 Sudan40.2%
🇸🇧 Solomon Islands40.1%
🇲🇷 Mauritania39.9%
🇷🇼 Rwanda39.8%
🇰🇲 Comoros39.3%
🇰🇪 Kenya39.2%
🇾🇪 Yemen39.2%
🇻🇺 Vanuatu38.7%
🇮🇶 Iraq38.0%
🇼🇸 Samoa37.9%
🇸🇿 Eswatini37.8%
🇬🇭 Ghana37.4%
🇹🇱 Timor-Leste37.3%
🇬🇦 Gabon37.2%
🇹🇯 Tajikistan37.1%
🇬🇶 Equatorial Guinea37.0%
🇳🇦 Namibia36.9%
🇰🇮 Kiribati35.8%
🇵🇬 Papua New Guinea35.5%
🇵🇰 Pakistan35.1%
🇹🇴Tonga35.1%
🇬🇹 Guatemala33.9%
🇧🇼 Botswana33.8%
🇪🇬 Egypt33.8%
🇯🇴 Jordan33.6%
🇭🇹 Haiti32.9%
🇰🇬 Kyrgyzstan32.5%
🇱🇸 Lesotho32.5%
🇱🇦 Laos32.3%
🇫🇲 Micronesia31.5%
🇭🇳 Honduras31.2%
🇰🇭 Cambodia31.1%
🇸🇾 Syria31.1%
🇲🇳 Mongolia30.8%
🇹🇲 Turkmenistan30.8%
🇧🇴 Bolivia30.6%
🇩🇿 Algeria30.6%
🇵🇭 Philippines30.5%
🇳🇮 Nicaragua29.9%
🇧🇿 Belize29.7%
🇳🇵 Nepal29.6%
🇫🇯 Fiji29.3%
🇩🇯 Djibouti29.2%
🇵🇾 Paraguay29.2%
🇿🇦 South Africa29.0%
🇰🇿 Kazakhstan28.9%
🇺🇿 Uzbekistan28.8%
🇨🇻 Cape Verde28.4%
🇱🇾 Libya28.1%
🇬🇾 Guyana27.9%
🇮🇱 Israel27.9%
🇩🇴 Dominican Republic27.7%
🇪🇨 Ecuador27.7%
🇻🇪 Venezuela27.4%
🇧🇩 Bangladesh27.2%
🇲🇦 Morocco27.0%
🇸🇻 El Salvador26.9%
🇸🇷 Suriname26.9%
🇵🇦 Panama26.8%
🇮🇳 India26.6%
🇮🇩 Indonesia26.2%
🇲🇽 Mexico26.2%
🇲🇲 Myanmar25.9%
🇱🇧 Lebanon25.6%
🇧🇹 Bhutan25.3%
🇵🇪 Peru25.3%
🇸🇦 Saudi Arabia24.9%
🇮🇷 Iran24.7%
🇦🇷 Argentina24.6%
🇹🇷 Turkey24.3%
🇹🇳 Tunisia24.2%
🇬🇺 Guam24.1%
🇱🇰 Sri Lanka24.0%
🇬🇩 Grenada23.7%
🇲🇾 Malaysia23.7%
🇸🇨 Seychelles23.7%
🇯🇲 Jamaica23.5%
🇦🇿Azerbaijan23.4%
🇻🇳 Vietnam23.2%
🇧🇳 Brunei 22.6%
🇨🇴 Colombia22.6%
🇵🇫 French Polynesia22.6%
🇳🇨 New Caledonia22.4%
🇴🇲 Oman22.4%
🇻🇨 St. Vincent and the Grenadines22.2%
🇧🇸 Bahamas22.1%
🇦🇬 Antigua and Barbuda22.0%
🇰🇼 Kuwait21.6%
🇮🇪 Ireland21.2%
🇨🇷 Costa Rica21.1%
🇧🇷 Brazil21.0%
🇦🇲 Armenia20.8%
🇺🇾 Uruguay20.5%
🇹🇹 Trinidad and Tobago20.3%
🇬🇪 Georgia20.0%
🇰🇵 North Korea20.0%
🇲🇻 Maldives19.9%
🇮🇸 Iceland19.6%
🇳🇿 New Zealand19.6%
🇨🇱 Chile19.5%
🇻🇮 U.S. Virgin Islands19.5%
🇦🇺 Australia19.3%
🇧🇭 Bahrain18.7%
🇨🇼 Curacao18.5%
🇺🇸 United States18.5%
🇱🇨 St. Lucia18.2%
🇲🇪 Montenegro18.2%
🇷🇺 Russia18.2%
🇨🇳 China17.8%
🇫🇷 France17.8%
🇬🇧 United Kingdom17.7%
🇦🇼 Aruba17.6%
🇸🇪 Sweden17.6%
🇦🇱 Albania17.4%
🇳🇴 Norway17.4%
🇲🇺 Mauritius17.3%
🇧🇪 Belgium17.1%
🇧🇧 Barbados17.1%
🇧🇾 Belarus17.0%
🇹🇭 Thailand16.8%
🇨🇾 Cyprus16.7%
🇪🇪 Estonia16.5%
🇩🇰 Denmark16.4%
🇲🇰 North Macedonia16.4%
🇱🇻 Latvia16.3%
🇵🇷 Puerto Rico16.3%
🇨🇺 Cuba16.0%
🇫🇮 Finland16.0%
🇲🇩 Moldova15.9%
🇳🇱 Netherlands15.9%
🇺🇦 Ukraine15.9%
🇨🇦 Canada15.8%
🇨🇿 Czech Republic15.7%
🇱🇺 Luxembourg15.7%
🇷🇴 Romania15.6%
🇷🇸 Serbia15.5%
🇸🇰 Slovakia15.5%
🇵🇱 Poland15.2%
Channel Islands15.1%
🇱🇹 Lithuania15.1%
🇸🇮 Slovenia15.1%
🇨🇭 Switzerland14.9%
🇦🇪 United Arab Emirates14.7%
🇧🇬 Bulgaria14.7%
🇧🇦 Bosnia and Herzegovina14.7%
🇪🇸 Spain14.6%
🇭🇷 Croatia14.6%
🇦🇹 Austria14.4%
🇭🇺 Hungary14.4%
🇲🇹 Malta14.3%
🇲🇴 Macao SAR, China14.0%
🇬🇷 Greece13.9%
🇩🇪 Germany13.8%
🇶🇦 Qatar13.6%
🇵🇹 Portugal13.3%
🇮🇹 Italy13.2%
🇰🇷 South Korea12.7%
🇯🇵 Japan12.6%
🇭🇰 Hong Kong SAR, China12.3%
🇸🇬 Singapore12.3%

Young countries have significant opportunities ahead of them. A younger population means a larger upcoming workforce and more opportunities for innovation and economic growth.

While domestic markets in Africa grow in terms of labor supply, innovation, and potential consumers, there are also challenges that arise in these countries. Corruption, political instability and unemployment, particularly in Africa, are all potential barriers to prosperity for the continent’s Gen Z population.

Populations Skewing Older

The world’s oldest country is Japan, where 28% of the population is older than 65. However, it’s an anomaly—the rest of the oldest countries in the top 10 are all in Europe.

Globally, it’s the 65+ age group that is growing the fastest. According to the same UN estimates, it is predicted that by 2050 that one in six people will be over 65 years old.

Here’s a full list of global countries, sorted by percentage of population over 65 years old:

CountryShare of Population Older Than 65 (% of total, 2019)
🇯🇵 Japan28.0%
🇮🇹 Italy23.0%
🇵🇹 Portugal22.4%
🇫🇮 Finland22.1%
🇬🇷 Greece21.9%
🇩🇪 Germany21.5%
🇧🇬 Bulgaria21.2%
🇭🇷 Croatia20.8%
🇲🇹 Malta20.8%
🇫🇷 France20.3%
🇱🇻 Latvia20.3%
🇸🇪 Sweden20.1%
🇸🇮 Slovenia20.1%
🇱🇹 Lithuania20.1%
🇪🇪 Estonia19.9%
🇩🇰 Denmark19.9%
🇻🇮 U.S. Virgin Islands 19.8%
🇨🇿 Czech Republic19.8%
🇵🇷 Puerto Rico19.6%
🇭🇺 Hungary19.6%
🇪🇸 Spain19.6%
🇳🇱 Netherlands19.6%
🇦🇹 Austria19.0%
🇧🇪 Belgium19.0%
🇨🇭 Switzerland18.8%
🇷🇴 Romania18.7%
🇷🇸 Serbia18.7%
🇬🇧 United Kingdom18.5%
🇵🇱 Poland18.1%
🇨🇦 Canada17.6%
Channel Islands17.6%
🇭🇰 Hong Kong SAR, China17.4%
🇳🇴 Norway17.2%
🇧🇦 Bosnia and Herzegovina17.2%
🇨🇼 Curaçao17.1%
🇺🇦 Ukraine16.7%
🇧🇧 Barbados16.2%
🇺🇸 United States16.2%
🇸🇰 Slovakia16.1%
🇳🇿 New Zealand15.9%
🇦🇺 Australia15.9%
🇨🇺 Cuba15.5%
🇲🇪 Montenegro15.3%
🇧🇾 Belarus15.2%
🇮🇸 Iceland15.1%
🇷🇺 Russia15.0%
🇬🇪 Georgia15.0%
🇰🇷 South Korea15.0%
🇺🇾 Uruguay14.9%
🇱🇺 Luxembourg14.2%
🇮🇪 Ireland14.2%
🇦🇱 Albania14.2%
🇲🇰 North Macedonia14.0%
🇦🇼 Aruba14.0%
🇨🇾 Cyprus14.0%
🇹🇭 Thailand12.4%
🇸🇬 Singapore12.3%
🇮🇱 Israel12.2%
🇲🇩 Moldova12.0%
🇲🇺 Mauritius11.9%
🇨🇱 Chile11.8%
🇦🇲 Armenia11.4%
🇨🇳 China11.4%
🇦🇷 Argentina11.2%
🇲🇴 Macao SAR, China11.2%
🇹🇹 Trinidad and Tobago11.1%
🇱🇰 Sri Lanka10.8%
🇬🇺 Guam10.1%
🇱🇨 St. Lucia10.0%
🇨🇷 Costa Rica9.8%
🇻🇨 St. Vincent and the Grenadines9.7%
🇬🇩 Grenada9.6%
🇳🇨 New Caledonia9.4%
🇰🇵 North Korea9.2%
🇧🇷 Brazil9.2%
🇦🇬 Antigua and Barbuda9.0%
🇯🇲 Jamaica8.9%
🇨🇴 Colombia8.7%
🇹🇷 Turkey8.7%
🇵🇫 French Polynesia8.6%
🇹🇳 Tunisia8.5%
🇸🇻 El Salvador8.4%
🇵🇪 Peru8.3%
🇵🇦 Panama8.3%
🇸🇨 Seychelles7.8%
🇰🇿 Kazakhstan7.6%
🇻🇪 Venezuela7.6%
🇻🇳 Vietnam7.5%
🇧🇸 Bahamas7.4%
🇲🇽 Mexico7.4%
🇪🇨 Ecuador7.3%
🇧🇴 Bolivia7.3%
🇲🇦 Morocco7.3%
🇩🇴 Dominican Republic7.2%
🇱🇧 Lebanon7.2%
🇸🇷 Suriname7.0%
🇲🇾 Malaysia6.9%
🇬🇾 Guyana6.7%
🇵🇾 Paraguay6.6%
🇩🇿 Algeria6.5%
🇦🇿 Azerbaijan6.4%
🇮🇳 India6.3%
🇮🇷 Iran6.3%
🇧🇹 Bhutan6.0%
🇮🇩 Indonesia6.0%
🇲🇲 Myanmar6.0%
🇹🇴 Tonga5.9%
🇳🇵 Nepal5.7%
🇫🇯 Fiji5.6%
🇳🇮 Nicaragua5.4%
🇿🇦 South Africa5.4%
🇵🇭 Philippines5.3%
🇪🇬 Egypt5.2%
🇧🇳 Brunei 5.2%
🇧🇩 Bangladesh5.1%
🇭🇹 Haiti5.0%
🇼🇸 Samoa4.9%
🇬🇹 Guatemala4.9%
🇱🇸 Lesotho4.9%
🇧🇿 Belize4.8%
🇭🇳 Honduras4.8%
🇰🇭 Cambodia4.7%
🇨🇻 Cape Verde4.6%
🇸🇾 Syria4.6%
🇩🇯 Djibouti4.6%
🇰🇬 Kyrgyzstan4.6%
🇺🇿 Uzbekistan4.5%
🇹🇲 Turkmenistan4.5%
🇱🇾 Libya4.4%
🇧🇼 Botswana4.3%
🇵🇰 Pakistan4.3%
🇹🇱 Timor-Leste4.2%
🇫🇲 Micronesia4.1%
🇲🇳 Mongolia4.1%
🇱🇦 Laos4.1%
🇰🇮 Kiribati4.0%
🇸🇿 Eswatini4.0%
🇯🇴 Jordan3.8%
🇲🇻 Maldives3.6%
🇸🇧 Solomon Islands3.6%
🇸🇩 Sudan3.6%
🇻🇺 Vanuatu3.6%
🇳🇦 Namibia3.6%
🇬🇦 Gabon3.5%
🇪🇹 Ethiopia3.5%
🇵🇬 Papua New Guinea3.5%
🇸🇦 Saudi Arabia3.4%
🇮🇶 Iraq3.3%
🇸🇸 South Sudan3.3%
🇱🇷 Liberia3.2%
🇧🇯 Benin3.2%
🇲🇷 Mauritania3.1%
🇸🇳 Senegal3.0%
🇬🇭 Ghana3.0%
🇹🇯 Tajikistan3.0%
🇰🇲 Comoros3.0%
🇲🇬 Madagascar3.0%
🇷🇼 Rwanda3.0%
🇨🇩 Democratic Republic of the Congo3.0%
🇿🇼 Zimbabwe2.9%
🇸🇹 Sao Tome and Principe2.9%
🇸🇱 Sierra Leone2.9%
🇬🇳 Guinea2.9%
🇾🇪 Yemen2.9%
🇸🇴 Somalia2.8%
🇹🇬 Togo2.8%
🇲🇿 Mozambique2.8%
🇨🇮 Cote d'Ivoire2.8%
🇬🇼 Guinea-Bissau2.8%
🇨🇫 Central African Republic2.8%
🇰🇼 Kuwait2.7%
🇳🇬 Nigeria2.7%
🇨🇲 Cameroon2.7%
🇨🇬 Congo2.7%
🇲🇼 Malawi2.6%
🇹🇿 Tanzania2.6%
🇦🇫 Afghanistan2.6%
🇳🇪 Niger2.5%
🇬🇲 The Gambia2.5%
🇧🇭 Bahrain2.5%
🇲🇱 Mali2.4%
🇹🇩 Chad2.4%
🇴🇲 Oman2.4%
🇬🇶 Equatorial Guinea2.4%
🇰🇪 Kenya2.4%
🇧🇫 Burkina Faso2.4%
🇧🇮 Burundi2.3%
🇦🇴 Angola2.1%
🇿🇲 Zambia2.1%
🇺🇬 Uganda1.9%
🇶🇦 Qatar1.5%
🇦🇪 United Arab Emirates1.1%

Fewer births, and a resulting older population, is a trend attributed to the changing lifestyles of women. For example, Japan’s fertility rate has fallen to less than 1.5 children per woman due to modern access to contraceptives and the prioritization of work over marriage and family life.

However, fewer young people also means a smaller workforce on the horizon and a shrinking domestic market. There is also a rising social cost of caring for the elderly, as longer lifespans have resulted in a higher prevalence of chronic diseases and an increasing inability to care for oneself. This can result in an increased tax burden on the diminishing younger, working population.

Another Perspective on the Data

Looking at the data from the opposite angle also reveals information about our world. Here’s a look at the countries with the lowest proportions of younger or older people.

youngest and oldest countries

Hong Kong and Singapore have some of the lowest fertility rates in the world (1.1), so it’s no surprise to see low numbers of children in their demographic data.

In a country like the United Arab Emirates, the majority of the population is made up of foreign workers, so the number of people in the 65+ age group is extremely low. In the coming decades though, the situation is expected to shift dramatically with one in every five Emiratis residing that age group by 2050.

The Big Picture

While each country has its own unique demographic make up, one thing is clear. As education and wealth levels rise around the world, fertility rates are dropping almost everywhere.

The trend of long life expectancies and fewer births is likely to continue, but young outliers will remain and they present immense economic potential.

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Investor Education

Fact Check: The Truth Behind Five ESG Myths

ESG investing continues to break fund inflow records. In this infographic, we unpack five common ESG myths.

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ESG Myths

Fact Check: The Truth Behind 5 ESG Myths

In 2021, investors continue to embrace environmental, social, and governance (ESG) investments at record levels.

In the first quarter of 2021, global ESG fund inflows outpaced the last four consecutive quarters, reaching $2 trillion. But while ESG gains rapid momentum, the CFA Institute shows that 33% of professional investors surveyed feel they have insufficient knowledge for considering ESG issues.

To help investors understand this growing trend, this infographic from MSCI helps provide a fact check on five common ESG myths.

1. “ESG Comes at the Expense of Investment Performance”

Fact Check: Not necessarily

Worldwide, ESG-focused companies have not only seen higher returns, but stronger earnings growth and dividends.

Returns by ESG RatingsEarnings Growth*Active Return**Dividends and Buybacks
Top tier2.89%1.31%0.28%
Middle tier1.35%0.12%-0.02%
Bottom tier-9.22%-1.25%-0.05%

Source: MSCI ESG Research LLC (Dec, 2020)
*Contribution of earnings growth and dividends/buybacks to active return
**Active return is the additional gain or loss compared to it respective benchmark

In fact, a separate study from the CFA Institute shows that 35% of investment professionals invest in ESG to improve their financial returns.

2. “Investors Talk About ESG But Don’t Invest In It”

Fact Check: False

Global ESG assets under management (AUM) in ETFs have grown from $6 billion in 2015 to $150 billion in 2020. In just five years, ESG AUM have accelerated 25 times.

Today, money managers are focusing on the following top five issues:

Top ESG IssuesAssets AffectedGrowth in Assets Affected (2018-2020)
Climate change / carbon emissions $4.18T39%
Anti-corruption$2.44T10%
Board issues$2.39T66%
Sustainable natural resources / agriculture$2.38T81%
Executive pay$2.22T122%

Source: US SIF Foundation (Nov, 2020)

Meanwhile, over 1,500 shareholder resolutions focused on ESG-related matters were filed between 2018-2020. Not only are investors turning to ESG assets, but they are placing higher demands on corporate responsibility.

3. “ESG Investment Strategies Eliminate Entire Sectors”

Fact Check: Not necessarily

First, not all ESG investment approaches are exclusionary.

For instance, in North America roughly 51% of ESG ETFs used an ESG integration approach as of Dec. 31, 2020. In an ESG integration approach, ESG risks and opportunities are analyzed with the goal to support long-term returns.

By comparison, values and screens approaches, which accounted for over 22% of ESG ETFs in North America may screen out specific business activities, such as alcohol or tobacco, or sectors such as oil & gas.

Percentage of ESG TypeIntegrationValues & ScreensThematicImpact
North America50.9%22.5%20.7%5.9%
Asia57.8%34.6%3.8%3.8%
Europe30.8%60.6%8.6%0.0%
Australia28.6%71.4%0.0%0.0%

Source: Refinitiv/Lipper and MSCI ESG Research LLC as of Dec 31, 2020 (MSCI Feb, 2021)

Second, companies are assessed on a sector-specific basis where ESG leaders and laggards are identified within each sector in comparison to peers. In other words, ESG doesn’t mean eliminating exposure to entire sectors. Instead, investors can choose from a range of companies based on their ESG ratings quality.

4. “ESG Investing Is Only For Millennials”

Fact Check: False

Although ESG is popular among millennials, ESG investing is being driven by the entire investor population. In 2019, one study finds that 85% of the general population expressed interest in ESG investing.

Interest in Sustainable InvestingGeneral PopulationMillennials
201985%95%
201571%84%

Source: US SIF Foundation (Nov, 2020)

Sustainable investing goes far beyond millennials—ESG disclosures are quickly becoming requirements for key industry participants, such as institutional investors and listed companies.

5. “ESG Investing is Here to Stay”

Fact Check: True

Climbing 28% in 2020 alone, over 3,000 signatories have committed to the UN Principles of Responsible Investment. As of the first quarter of 2021, 313 global organizations and 33 asset owners have been newly added.

Growth of UN PRINumber of Signatories*AUM Represented
20203,038$103.4T
20192,370$86.3T

Source: UN PRI
*As of Mar, 2020

Central to ESG’s growth is the availability of ESG investments. ESG investing has become more widely accessible—which wasn’t always the case. Over the last decade, the global number of ESG ETFs has grown from 46 to 497.

Why the Facts Matter

As ESG investments continue to play an even greater role in investor portfolios, it’s important to focus on data rather than prevailing ESG myths that are not backed by fact.

Given the recent momentum in investment returns and ESG adoption, data-driven evidence empowers investors to build more sustainable portfolios that better align with their investment objectives.

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Markets

Visualizing the Recent Explosion in Lumber Prices

Lumber prices in the U.S. continue to break records as pressure from both the supply and demand sides of the market collide.

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Visualizing the Recent Explosion in Lumber Prices

Lumber is an important commodity used in construction, and refers to wood that has been processed into beams or planks.

Fluctuations in its price, which is typically quoted in USD/1,000 board feet (bd ft), can significantly affect the housing industry and in turn, influence the broader U.S. economy.

To understand the impact that lumber prices can have, we’ve visualized the number of homes that can be built with $50,000 worth of lumber, one year apart.

A Story of Supply and Demand

Before discussing the infographic above, it’s important to understand the market’s current environment.

In just one year, the price of lumber has increased 377%—reaching a record high of $1,635 per 1,000 bd ft. For context, lumber has historically fluctuated between $200 to $400.

To understand what’s driving lumber prices to new heights, let’s look at two economic elements: supply and demand.

Shortened Supply

U.S. lumber supplies came under pressure in April 2017, when the Trump administration raised tariffs on Canadian lumber. Since then, lumber imports have fallen and prices have experienced significant volatility.

After a brief stint above $600 in April 2018, lumber quickly tumbled down to sub $250 levels, causing a number of sawmills to shut down. The resulting decreases in production capacity (supply) were estimated to be around 3 billion board feet.

Once COVID-19 emerged, labor shortages cut production even further, making the lumber market incredibly sensitive to demand shocks. The U.S. government has since reduced its tariffs on Canadian lumber, but these measures appear to be an example of too little, too late.

Pent-up Demand

Against expectations, COVID-19 has led to a significant boom in housing markets, greatly increasing the need for lumber.

Lockdowns in early 2020 delayed many home purchases until later in the year, while increased savings rates during the pandemic meant Americans had more cash on hand. The demand for homes was further amplified by record-low mortgage rates across the country.

Existing homeowners needed lumber too, as many Americans suddenly found themselves requiring upgrades and renovations to accommodate their new stay-at-home lifestyles.

How Many Homes Can You Build With $50K of Lumber?

To see how burgeoning lumber prices are impacting the U.S. housing market, we’ve calculated the number of single family homes that could be built with $50,000 worth of lumber. First, we established the following parameters:

  • Lumber requirements: 6.3 board feet (bd ft) per square foot (sq ft)
  • Median single family house size: 2,301 sq ft
  • Total lumber required per single family house: 14,496 bd ft

Based on these parameters, here’s how many single family homes can be built with $50,000 worth of lumber:

Date*Lumber PriceTotal Lumber PurchasedTotal Homes Built
2021-05-05$1,635 per 1,000 bd ft30,581 bd ft2.11
2020-05-04$343 per 1,000 bd ft145,773 bd ft10.05
2015-05-01$234 per 1,000 bd ft213,675 bd ft14.74
2010-05-01$270 per 1,000 bd ft185,185 bd ft12.77

*Exact matching dates were not available for past years.
Source: Insider

As lumber prices continue to set record highs, the National Association of Home Builders (NAHB) has reported that the cost to build a single family home has increased by $36,000. Most of this cost can be passed down to the consumer, but extremely tight supplies mean homebuilders are unable to start more projects.

The Clock is Ticking

Despite their best efforts to increase output, it’s likely that sawmills across the U.S. will continue playing catch-up in 2021.

“There was a great fear among sawmills to prepare for a downturn. When home buying surged, they could not open up capacity quickly enough.”
– Lawrence Yun, National Association of Realtors

Analysts are now warning that lumber prices could reach a flashpoint, where affordability becomes so limited that demand suddenly falls off. This has led the NAHB to ask the Biden administration for a temporary pause on Canadian lumber tariffs, which currently sit at 9%.

U.S. tariffs on Canadian lumber were first introduced in 1982, and represent one of the longest lasting trade wars between the two nations. The U.S. is currently appealing a World Trade Organization (WTO) ruling that states its 2017 tariff hike was a breach of global trading rules.

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