North-central Idaho sawmills may sustain their rebound from the 2007 recession this year.

Potlatch Corp., one of the biggest timber owners in Idaho, anticipates that demand for U.S. lumber - which jumped by 6 percent in 2012 - will increase an additional 10 percent in 2013 as the housing market rebounds, according to an annual earnings report by the company.

Lumber prices have already risen and should climb more, according to the report. "Sawmill capacity is struggling to meet that higher demand after many years of poor performance, and last year's strong demand for lumber left dealers with relatively low inventory levels."

What benefits Potlatch will likely help the other mills in the region, says Kathryn Tacke, an economist with the Idaho Department of Labor in Lewiston.

"We've seen so many hopeful signs in the U.S. housing market in recent weeks," she says.

Employment at lumber mills in north-central Idaho peaked at 1,166 in 2006. Now, 820 people work at those mills, Tacke says. North-central Idaho includes Clearwater, Idaho, Latah, Lewis and Nez Perce counties.

The lumber sector weathered the economic downturn better than expected, Tacke says.

"One of the reasons they've done as well as they have is they've expanded into the export market," she says.

Potlatch finished 2012 with a net income of $42.6 million, compared with $40.3 million in 2011.

ewilliams@lmtribune.com, (208) 848-2261