Lumbermen eye the current state of the industry

PUOYED by a record level of U housing starts and the promise of more, members of the Western Wood Products Association" at their annual spring meeting in San Francisco, were told:

I that galloping inflation will be curbed in the U.S.-Dr. Charls E. Walker, Under Secretary of the Treasury f] that multiple use of the forests is best for both public and private sectors-John Hampton, WWPA president n that 1973 has all the earmarks of a tight money year-Dr. Julian H. Taylor, Bank of America economist .[ that housins units of all kinds should total ab-out 2.6 million this year-Wendell Barnes, exec. vp., WWPA.

Dr. Walker cited 15 major economic indicators exhibiting positive improvement in the early months of 1972 and forecast a good year for business and industry.

Tracing some of the economic forces at play in recent years, Dr. Walker pointed out that the labor force had been increasing more rapidly than general economic expansion, thus artificially increasing unemployment statistics. "In I97I," he said, oothe nation suffered the first foreign trade deficit since 1ggg."

Even though the Nixon Administration has judged it necessary to impose economic controls, Dr. Walker said, government leaders regard this as a temporary condition. "The Administration," he said, "is verv much prejudiced against economic control as a way of life in this country."

He pointed out that realize how restrictive persons Wilder- ness law actually is. It prevents any motorized vehicle, be it pickup truck and. camper or motor boat, from being used in the areas, and bans even picnic tables.

Story of q Glqnce

Inflation, multiple use, housing starts and tight money are examined at \{WPA's Spring confab optimism remains high among members, some gloom seen for 1973.

Although 1972 will be a good year for lumbermen, 1973 has all the earmarks of another tight monev period. This was the essence of the talk by Dr. Julian H. Taylor.

Dr. Taylor gave three reasons for his prediction:

(I) Domestic monetary and fiscal policy are headed in a direction which could readily encourage runaway inflation;

(2) Wage and price controls have failed to prove themselves in a per. iod of economic expansion, and

(3) The United States is taking a fiscal beating under a shifting international monetary and trade policy.

However, some of his statements were refuted later in the day when three members of the staff of the Fedelal Price Commission answered questions from WWPA members.

The FPC men said that, contrary to wage and price controls failing. the rate of inflation has been slowed to 3 per cent this year, and the Commission expects that it will be down to 2.5 per cent by the end oI 1972.

The three said that when they returned to Washington, D.C., they would contact the White Hoirse, the O{fice of Economic Advisers, the Departments of Agriculture, Interior and Commerceo and the Cost of Liv. irg Council to determine if any changes might be made in the federal timber sale process or in the lack of ceiling on timber.

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The momentum of a recordbreaking year of housing in 1971, when 2.08 million units were built, is expected to carry, well into 1972 with a total of 2.6 million units of all kinds, Wendell B. Barnes told members at the March 7-I0 meetine.

He estimated rhat for 1972, coi. ventional housing, both single-fam. ily and multi-family, should total 2.1 million starts" with mobile homes tcr add another 500,000 units.

Barnes predicted that construction of single-family units will continue an upward trend, increasing to 57 percent of conventional starts for 1972, compared to approximately 55 percent during 1971.

Reviewing the reasons for optimism he said that the four major financial intermediaries, Iife insurance, savings and loans, mutual savings banks and commercial banks continue to report high levels of de. posits.

Approximately 37 billion board feet of softwood lumber were con. sumed in the United States during 1971. he noted. and foresaw need for an additional one billion board feet more, or 38 billion board feet, needed Ior 1972.

Wise use of the nation's forests, both public and private, can serve the citizens much better than severeIy restricting their use, according to John Hampton.

They agreed with WWPA members that, while the Price Commission sought to hold down prices on the finished product, another feder. al agency, the Department of Agriculture, sought to obtain the highest price possible on the raw material, standine timber.

About 40 percent of the added volume. or 7.5 billion board feet is expected to come from Canada, with the balance fairly evenly distributed between Western and Southern producing regions.

Production in the \[est is expected to increase about 800 million over 1971, but 200-300 million feet of this will go into the lumber export market.

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