Year end market forecast

66|-FHE pent-up demand for hous- ing in the United States is about to break loose and, when it does, the lumber market will move steadily upward," Wendell B. Barnes recently told The Merchant in an exclusive forecast.

Barnes cited President Nixon's Second Annual Report on National Housing Goals which points up the need to increase the supply of softwood timber and develop adequate lumber substitutes to overcome the threatened "lumber barrier." AIthough the President's report indicates sufficient softwood lumber and plywood at current price levels dur. ing fiscal 1970 and 1971, it indi cated 1972 would probably find supply lagging behind demand.

*AIl indicators," said Barnes, "point to strengthening of the demand for softwood lumber. The federal government's leading indices moved upward sharply in July and the Department of Commerce feels that the composite index supports a strength in busines activity suggested by other data."

Barnes cited the steady growth in the number of households in the United States. 'oCensus figures and projections show a rise from 53 million in 1960 to 62 million in 1969," he said. "This is substantial growth in family units which we have not been able to house adequately over the last decade for a number of economic reasons.t'

Marriage and birth rate projections also support a need for additional housing, Barnes pointed out. Recent projections of the building marketing research director for the Ponderosa Pine lVoodwork Association project marriages rising from

1.9 million in 1970 to 2.4 million by 1979. The same source predicts birth rates will rise from 3.6 million to 4.3 million in the same period.

Story aI s Glonce

Housing starts will increase by about 150,000 . . . softwood demand will strengthen . . multifamily starts will decline one percent to Mo/o of conventional starts . . long range outlook good.

- Barnes cautioned that although the long range oudook for housing is good, sharp rises in the economy and the housing market should not be expected immediately. "In March," said Barnes, "WWPA forecast some I.4 million housing starts for 1970 while others were predicting starts at a lower level. Recently, however, economists have been re. vising their earlier estimates up. ward. Louis Barba, president of the National Association of Home Builders, is now predicting 1.45 to 1.5 million starts in 1970."

.In the coming years, Barnes said, the industry expects an additional 1.6 billion board feet of softwood lumber will be consumed. "This is based on a revised projection of 32.2 billion bf. to be consumed in 1970 and 33.8 billion in 1971," he said.

The largest single contributing factor to this growth is increased housing startso Barnes pointed out. "WWPA's forecast for l97I is I.55 million housing units, up 150,000 from the forecast for 1970."

A recent survey of a sample oI 2,.