Home lmprovement 1

The home improvement products market is expected to rebound in 1992 after two soft years, increasing 5.07o over 1991 levels, to $109.8 billion in sales.

The long term outlook for home improvement products remains strong. The industry can expect a 6.5Vo average annual growth rate for 1993-1996, according to the Home Improvement Research Institute.

Consumer purchases for repair, maintenance and improvement activities for existing residential structures represent the majority of sales. As the economy strengthens during 1992, expenditures by retail customers should grow by 5.}Vo to $7 I .6 billion.

Consumer spending should grow at a rate comparable to that of the total home improvement market for 19931996. Lumber and building materials and lawn and garden equipment and supplies are expected to fuel a significant portion of this growth.

Over the next several quarters, hardware and building supply stores are expected to grow at a modest pace relative to the mid-1980s boom. but faster than total retail sales. Growth is expected to rebound to 4.8Vo in 1992 and average 6.3Vo over the period 1992-1996.

Other things equal, sales of home improvement products to consumers rise and fall in step with real disposable income. Over the five-year forecast the 2.3Vo expected average annual growth of real income will be a positive factor for consumer home improvement activity.

Housing market activity is an important factor for home improvement products because a large share of home improvement activity occurs within a few months before and after the purchase of a home. With housing starts projected to be up ll%o and existing home sales up 3.97o In 1992, "housing activity" will be nearly as important as the recovery of real income growth. Modest increases in housing starts projected for 1993-1996

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Wholesalers Seek Millions In "Phantom Freight" Case

U.S. wholesalers have revived memories of the lO-year-long "phantom freight" plywood case, charging recently that 15 top Canadian mills conspired to fix freight charges on shipments of softwood lumber products into the U.S.

The class action lawsuit contends the mills violated U.S. antitrust laws, restraining interstate trade and commerce in artificially raising, fixing, maintaining or stabilizing softwood prices using mutually agreed upon freight rates.

The precalculated fees did not reflect each shipment's true weight or any discounts or incentives teceived from the transporter, says the suit.

Interestingly, the case is spearheaded by the same Philadelphia, Pa.,law firm which handled the plywood antitrust case. Thatsuitwasfiled in 1973, wonin trial by the plaintiffs in 1978, appealed and finally settled in 1983 as it was to go before the Supreme Court. Thousands of softwood plywood purchasers were awarded a total of $171 million over three years.

The new suit was filed July 17 in the

U.S. District Courtof Coloradoby bankrupt wholesaler Rivendell Forest Products, Englewood, Co., onbehalf ofmore than 500 who made direct purchases from the mills from August 1987 to July 1991. The mills responded by requesting a dismissal on the grounds that Canadian companies should not be charged with violations of U.S. antitrust laws. The court is currently deciding if the case should go to jury trial.

The defendants include Canadian Forest Products, Evans Products Co., Finlay Forest Industries, Fletcher Challenge Canada Ltd., Noranda Forest Sales, Northwood Pulp & Timber, Pope & Talbot, Proctor& Gamble Cellulose, Sinclar Enterprises, Slocan Forest Products, Tolko lndustries, Weldwood of Canada, West Fraser Mills, Westar Timber and Weyerhaeuser Canada Ltd.

The lawsuit seeks costs of the case plus triple the amount of damages. The suit estimates annual production of softwood lumber in western Canada to be 12 billion board feet, valued at about $2.5 billion, of which approximately 75% is sold into the U.S.

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