Canadian wood panels maker Norbord Inc has posted a wider-than-expected quarterly loss due to a slow recovery in US housing activity, which it expects will pick up in the second half of the year.

Toronto-based Norbord, which makes OSB for residential and commercial construction, said its 2011 capital budget would be higher than last year’s US$25m.

The weak results came a day after Canadian peer Tembec Inc posted results below market estimates and said its forest-products business would remain weak until US housing activity strengthens.

Norbord said actual Q1 US housing starts were 10% lower than last year, and North Central benchmark OSB prices fell US$14 to average US$198 in Q1.

US housing starts and permits for future home construction rose 7.2% in March, snapping back from the prior month’s winter depressed levels.

Revenue at Norbord, which also manufactures plywood and a range of other engineered wood products, rose 28%.

The company expects its European operations, which almost tripled its EBITDA to US$11m in the quarter, to continue to flourish.

“Our UK-based business is benefit ting from a currency advantage that is positively impacting both domestic markets and export opportunities,” Norbord said.