Southern Pine 2000: A five-year industry forecast

CIOUTHERN pine is in for an intertlesting end of the century, shaped by the following Southern Pine Council projections:

' The southern pine lumber business will be more supply driven than demand driven. Declining sawlog inventories plus strong demand will create a market ripe for competitive building products.

Story at a Glance

How SP will be marketed until the 21st Century ... treated, construction, industrial and export markets targeted.

' On the West Coast, environmental pressures restricting the available resource will continue, and lumber production will decline further before stabilizing. Canadian lumber production will drop, as well. In British Columbia alone, the harvest rate will decline l5Vobv 1996.

' In the South, the single most crucial issue the industry will face will be the impact of environmental regulations. The most ominous threat to supply in the southern states may be the issue of wetlands, covered under the Clean Water Act, since half of all southern pine grown in the South is in potential wetlands. The Endangered Species Act will also be used to restrict timber supplies in the South.

' Yet the demand for sawtimber will create an economic incentive, encouraging private landowners to offer more timber for sale. Increasing harvests to maintain elevated production volumes could shorten harvest cycles, creating a shortage of sawlogs, resulting in the production of less wide dimension and more plantation wood.

' Any benefits from increased timber management won't be realized for at least another l0 years. Logging costs will increase, but improving technology will mean higher yields. State and federal regulations vary, adding to the cost of expanded SP production.

In all, the supply of southern pine sawtimber should support production increases before stabilizing at just over 14 billion board feet (see chart at left). Overall growth of the U.S. economy will be modest, with a mild cyclical recession in 1998. Inflation will remain fairly low. Housing starts should range from 1.22 to 1.37 million units annually, with the largest gain predicted in multi-family units (chart above).

Builders will be using materials in a more efficient manner, seeking out alternative suppliers and substitutes, both wood and non-wood. In part, consumer preference towards southern pine will be influenced by their perception of what is environmentally acceptable. The southern lumber industry must get out its message of renewable resources and prudent management, countering steel's inroads to residential markets and plastic's impact on treated markets, such as decks, marine and transportation markets.

In order to target future promotions, the Southern Pine Council (formerly the Southern Pine Marketing Council) appointed a Select Panel of l5 industry experts to spend more than a year researching market conditions, trends and projections. The panel carefully assessed the southern pine resource, government regulations, the economy and the effects of environmental issues and substitute products.

They assembled specific objectives, tactics and time lines into Vision 2000, a comprehensive program for marketing SP products from 1995 through 1999. The five programs of the earlier Marketing Marathon II campaign were realigned into four sectors: Treated Products, Engineered & Framing, Industrial and Exports.

Treated Products

The program is designed to maintain the current level of treated production (including traditional outdoor living, marine and transportation markets) at 6 billion bf annually. A top priority is value-added construction, using treated SP in moisture-prone areas, floor joists and framing, plus fascia. Steady growth is forecast in both new residential and repair & remodeling markets.

All types of marine applications will be promoted, including bulkheads, piers and boardwalks, in fresh and saltwater environments. Developers needing to meet wetlands restrictions will build more elevated boardwalks, retaining walls and waterfront structures.

Consumer promotions will target the growth potential in backyard amenities, such as planters, benches and garden accessories. Sustained growth in housing starts and repair & remodeling activity will support this market.

The nation's aging transportation infrastructure will require refurbishing, resulting in increasing demand for noise barriers, timber bridges, sign posts and guardrail posts.

Engineered & Framing

Southern pine products have distinct sFuctural advantages. Residential construction, the traditional stronghold for wood framing, will be the top priority of promotions. Vision 2000 aims to retain SP's share in key markets, withstanding the influx of non-wood substitutes. A variety of new media campaigns will stress the message that wood products are structurally superior to steel and concreteand more environmentally friendly.

Ongoing targeted areas will be new nonresidential construction, reaching out to architects and engineers; roof alterations, converting flat, leaky roofs to pitched roofs; room additions, and post-frame construction in rural markets.

Use of trusses, glulam beams and other engineered wood products will also increase. Vision 2000 will show builders and specifiers how southern pine lumber is the perfect partner with the newest composite wood products.

work, flooring, paneling and exterior siding. SP shop grades can provide a readily available species alternative to manufacturers of millwork, windows and doors. More furniture manufacturers will also turn to SP for use in upper lines, in addition to crate-type furniture.

Southem Pine '95 '99

Billion bd. ft,: 5.24 5,82

Materials handling applications are projected to grow a steady 4.lVo per year through 1999. Research will soon be completed highlighting SP's purported advantages in softwood pallets. The volume of SP used for repair & remodeling, structural framing and specialty products is forecast to climb more than ll7o over the fiveyear period.

Exports

Although a strong domestic market has limited export volumes of late, a minimum l07o annual increase in SP offshore shipments is predicted over the next five years, especially to Mexico, Europe and Japan.

In Mexico, promotions will stress SP for industrial, millwork, joinery and other interior uses. In Europe, greater use of value-added SP products will be emphasized. And for Japanese markets, interior applications and glued-laminated beams will be highlighted.

The Southern Pine Council views Vision 2000 as a carefully drawn roadmap to the end of the century, a plan for successfully selling southern pine based on the latest research and industry projections.

Industrial Products

Non-building uses of southern pine will include materials handling, furniture, specialty moulding and mill-