U.S. sawmill production fell in the first quarter, the second consecutive quarter of lower output according to the Federal Reserve G.17 Industrial Production report. Sawmill output has remained largely flat since 2023, after increasing in the post-pandemic period. The utilization rate for sawmills and wood preservation industries was 71.8% on a four-quarter moving average, up from 71.2% in the fourth quarter of 2025.

The sawmill utilization rate, a measure of actual production relative to potential full production published quarterly by the Census Bureau, moved upward over 2025 as capacity for sawmills fell. Sawmill production, based on a four-quarter moving average, was 0.4% lower in the first quarter of 2026 compared to the fourth quarter but remained higher than a year ago by 1.7%. U.S. sawmills’ full production capacity, an estimation of what could have been produced if running at full production capability, was down 6.0% from a year ago.

Lumber prices rose slightly in the first quarter. Softwood lumber prices rose 6.1% during the quarter but were down 3.8% from a year ago. Hardwood lumber prices continued to increase, rising 1.0% in the first quarter. This was the ninth consecutive quarter of price increases in hardwood lumber.

Employment in sawmill and wood preservation industries continued to fall, dropping to roughly 82,800 workers in the first quarter. This marked the twelfth straight quarterly decline, bringing employment to its lowest level since 2010.