Better housing yeat

By Tom Denig President and CEO Trus Joist MacMillan

A vennl-I-. we think that 1992 Ywill be a better year for housing, though we certainly won't see the sharp rebound we've experienced exit- lns nre\'rnilq receqsions. Interest rates have recently become quite attractive. Banks are starting to adjust, however slowly, to the new, tighter lending rules.

Our best guess is that housing starts will range between l.l and 1.5 million. That represents an increase of l0-157o from today's depressed levels, the lowest since 1945. It's been a year for survivors, and next year those survivors should start benefiting from an improved market.

Structural composite lumber products continue to expand their market penetration, and 1992 should be no exception to this. Engineered wood structural components have found a growing acceptance for a number of reasons.

O.ld-growth timber is -rapidly becoming a scarce commodity. What's available now from the second and third growth commercial forests is often of unsuitable quality for stmctural applications. Trends also indicate that solid-sawn lumber prices will continue to increase over time. These combined facts lead to engineered wood products as the long-term solution to the structural applications previously provided by sawn lumber.

Structural composite lumber and wood I-joist products put much less pressure on our dwindling old-growth forest resources. They accomplish this in three ways: by initially recovering more of the log for structural purposes than traditional sawmill methods; by using currently non-commercial species; and by employing wood fiber in far more efficient methods. As an example, our new PSL 300 long strand lumber uses almost the entire interest rates, reduced land costs and lower labor and materials costs, the consumer may not have a better opportunity to buy a new home. No one is projecting a tum around in the housing sector. However, the industry did not see the tum around in 1983. The existing home surplus could be rectified quickly with a boost in consumer confidence and some changes in our lending institutions. A better than anticipated housing market will create much higher building material costs due to supply reductions, especially products from the Western United States and Canada. log with the bark converted into heat and energy. This is a much higher recovery rate than a sawmill producing dimension lumber can achieve. We also use aspen, rather than the expensive and dwindling fir and pine resources. Our joist is a structural member that uses about half the wood fiber, yet achieves results far superior to those of a comparably sized solidsawn joist.

The industry needs a boost. It will come, but the major question is "When?" 1993 could be the light at the end of the tunnel.

Next year we should see structural composite lumber start to transcend "specialty" status as the prototype lumber preferred for quality construction. A healthier market should speed this along.

Story at a Glance

Better environment for housing...starts between 1.1 and 1.5 million, a 10-15% jump ...structural composite lumber products growth will continue solving some old growth availability problems...advantages will lift it from specialty status.