Panel market slows

By William T. Robison President American Plywood Association

HE STRUCTURAL panelindustry has the potential to substantially enlarge its markets in the next quarter century.

As late as June the overall market outlook was strong enough to support a forecast of 27.2 billion sq. ft. of U.S. structural panel production in 1988. This small increase over the 27 billion feet of 1987 would have been the sixth consecutive growth year for the industry. But through the late summer and early fall there was a weaker housing market linked to rising interest rates. Although demand in other major panel markets has continued to be strong, the home buildevent us from achieving that sixth ing decline may prevent consecutive annual production record.

Story at a Glance

Big structural panel market expansion in next quarter century. nonresidential, home repair & remodeling, industrial uses all growing increased diversification necessary.

Next year, APA expects a continuation of higher interest rates, which will keep housing subdued, but not crippled. Some other markets may also moderate slightly, resulting in a down year for total demand.The outlook beyond 1989 is brighter as interest rates are expected to decline with inflationary threat receding. APA is projecting a short and modest market decline starting now and ending in early 1990.

With continued hard work and commitment to growth at home and abroad, the structural panel industry has the potential to substantially enlarge its markets in the next quarter century. Increased diversification will be necessary. Non-housing markets for structural panels have advanced by 1.6 billion sq. ft. per year since 1984, becoming the major factor enabling mills to expand demand in a period of declining housing starts. Domestic markets like nonresidential construction, home repair and remodeling and industrial applications are growing steadily as a direct result of APA/industry promotional teamwork.

The valuable international markets for U.S. structural panel products are expected to play a much larger role in the 1990s. In the years ahead, the panel industry will expand its promotional base into Spain and other Mediterranean countries, thus increasing its strong commitment to Europe as the primary overseas market. High priority will be assigned to promising emerging markets in the Caribbean as well as Japan, other Asian countries and parts of Latin America.

There are serious challenges to overcome in the years ahead. The senseless rationing and impoundment of America's abundant renewable public timber resource is an obstacle which we must battle. But with continued commitment to the broadening of the market base as well as developing more cost eflicient products, we'll beat the odds and maintain the healthy growth that enables us to better serve our customers at home and abroad.