VANCOUVER – West Fraser Timber’s chief executive says the U.S. housing market is recovering slowly and the longer-term trend appears positive but prices for the company’s products could be volatile this winter.

Lumber prices were up in the third quarter, helping boost the Vancouver-based company’s revenue and profit, but West Fraser CEO Ted Seraphim told analysts Tuesday that he was wary.

“Lumber demand has been relatively strong in October,” he said. “Nevertheless we are still early in the recovery of the housing market and as such we should expect some volatility in lumber and panel markets over the winter.”

Last week, West Fraser announced a plan to close its mill in Houston, B.C., affecting about 225 workers.

The closure is part of a larger plan including a timber tenure swap with Canfor to help provide some security to its mills in Quesnel, Smithers and Fraser Lake, B.C.

Canadian lumber producers were hit hard when U.S. homebuilders slowed construction to a crawl in during the economic downturn, which was deeper and longer in the United States than in Canada.

However, the U.S. housing market has shown some life recently. The U.S. reported last month that builders started work in August on the most single-family homes in six months.

Overall, U.S. builders broke ground in August on houses and apartments at an annual rate of 891,000, up from a rate of 883,000 from July. Housing starts in August were 19 per cent higher than a year earlier.

West Fraser reported Monday it earned $55 million or $1.29 per share on sales of $878 million in the quarter ended Sept. 30. That compared with a profit of $52 million or $1.21 per share on sales of $772 million a year ago.

Analysts on average had expected a profit of $1.35 per share, according to Thomson Reuters.