BUSINESS FORECAST '68 WWPA looks at the year ahead

CONSTRTICTION markets will be up v next year along with heavy military needs {or lumber, but raw material supply may limit production.

by WENDELL B. BARNES executive vice president Western Wood Products Association

HOUSING STARTS: Should be up about 100,000 over 1966. In tlre past two years there were only 2t/, million starts but at the same time there were 3[ million marriages. It is siqnificant that rental vacancies are at their lowest since 1959 and are headed lower. Housing shortages will develop in more of our major metropolitan areas even though there is expected to be an increase in private starts from about 1.3 million this year to about 1.5 million in 1968.

NON RESIDENTIAL BUILDINGS: F.

W. Dodge Co. has predicted a ten percent gain for stores and warehouses which slumped in '66 and '67, and. a three percent gain for religious building, generally , a s:eady year-to-year market. The most important structural uses for lumber in this area are in schools, churches and shopping centers.

MORTGAGE FUNDS: If funds are adequate, or even if they are tight, a crunching halt to construction, as in 1966 seems unlikely. Savings and loan associations have had a good inflow of funds. They are both more liquid and less heavily committed than in '66. It seems likely that the Federal Reserve authorities will be more careful to keep home builders in business, especially in vielv of the increasing shortage of dwelling units.

MILITARY USES: The demand for lumber, partly for construction in Vietnam, but even more for use in boxes, crates and pallets needed to ship vast quantities of munitions and supplies has grown rapidly in the past two years. Military procurement o{ softwood lumber has increased from less than a half billion bfm in 1965 to around l)/2 billion bfm this year.

RAW MATERIAL SUPPLY: The supply problem is two-pronged: Adequacy of the total raw material supply to meet demands for lumber and other forest products-let alone log exports to Japan. Second, the adequacy of the share of the tctrl that goes tc each of these end uses.

Another unknown in the 1968 picture is the question o{ how many mills may run short of logs in the strong spring market I as a result of last summer's severe fire wea- | ther. If logging crews can get into the I woods early next spring, there shouldn't I be too much trouble, but if it's a lete I spring, the supply of lumber can get tight. I