Modest growth in transPortation

By Gary D. Schlaeger Senior Assistant Vice President, Forest Products Burlington Northern Railroad

the forest products industry in the United States and Canada.

A significant oortion of the iailroad's total freight volume comes from the forest products industry. Factors affecting the forest products industry are imPortant to BN.

In 1986, housing starts in the United States will be about 1.8 million units. Housing starts are expected to decline about 5olo in 1987, to about 1.7 million units. Lumber consumption for total residential usage will probably decline about 2olo from 1986 levels.

While the residential rePair and remodeling segment of the industry

Story at a Glance

Canadian softwood lumber duty may increase demand from Pacific Northwest mills ... probable transportation price increase. . spot shortages of lumber hauling equiPment.. . prices will hold firm or even increase.

has experienced tremendous growth over the past few Years, it will probably soften by about 1.50/o in 1987.

The overall building industrY will decline slightly next year, also as a result of the non-residential glut. With an average office vacancy rate of about I 6o/n in large downtown areas, and up to 230/o in suburban areas, this particular segment needs a shot in the arm.

Finally, the new tax bill Passed by Congress contains Provisions making investments less attractive. The signs all seem to point to overall volume in the forest Products industry declining in 1987, but we

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