1975 Looks Good for Plywood After Slow Start

By BRONSON J. LEWIS EXECUTIVE VICE PRESIDENT AMERICAN PLYWOOD ASSOCIATION

plywood industry will look back on 1974 as a time of trial in its major market. home building. This year will also be remembered for the continuing bright performance of many nonhousing markets.

Looking ahead, however, there is considerable hope for a strong market recovery in 1975, with most of the action in the second half of the year.

Story at a Glance

Considerable hope for a strong market recovery in the second haff of '75 .... general construction will continue to be a strong plywood market .... industrial consumption of plywood will be up in'75 and '76.

Production curtailments and mill closures linked to the housing decline have been widespread through the summer and fall of 1974, particularly in the Pacific Northwest. The level of curtailments and closures has at times affected as much as one-third of the total plywood industry.

The substantial, and necessary' publicity concerning these closures has tended to obscure our solid achievements in the nonhousing markets.

Markets like general construction, remodeling and the transportation and materials handling sectors of industrial application have responded to intensified industry and association Promotional efforts.

Wellern Lumbcr and Bulldlng Mlterhl! ilERCHANT probably will enter 1975 with a lower physical volume on the railroad. However, our freight revenues will benefit in 1975 from the full-year effect of the general rate increase that was authorized in June 7974."

General construction has been enjoying boom conditions since late 1973. We expect the boom to moderate somewhat in 1975, but it should still offer plenty of opportunities for plywood.

HEThe over-the-counter market (do-it-yourself and contractor remodeling projects) is limited only by the extent to which we are prepared to invest in promotion. It is being helped by a national remodeling boom and by the steps APA hds taken in cooperation with dealers and distributors to improve our merchandising.

APA field men have been engaged in a nationwide series of calls that will have brought the latest association remodeling aids to 5,000 dealers by the end of 1974.

Our major remodeling publicity drive, currently scoring high for plywood in top consumer magazines, is being expanded with new projects this winter and next spring.

Despite its many current problems, the plywood industry looks forward to 19?5 and the years beyond with confidence. A continued strong industry promotion program will be the key to a better future.

Railroading

ESPITE the economic uncertainties and vexing inflation that continue to challenge the entire country, the officers of Union Pacific Corp. and its subsidiary, Union Pacific Railroad, say there is every reason to expect that the 9,500-mile road will continue its uptrend in profitability.

James H. Evans (pictured) president of the New York based corporation which is diversified along traditional lines of transportation, natural resources and land development, says that "We

"Looking even further into the future," Evans said, "We confidently believe that our transportation business will outperform the American economy. We serve one of the fastest growing regions of the country with a railroad that has long been highly regarded for its efficiency."

Story at a Glance

Despite tonnage declines in forest products hauled, UP believes market will recover in second half of '75 and plans for more boxcars energy problem is seen as a plus factor for UP.

Hauling lumber also is important to UP revenues, but because of the softening of the housing market, the railroad's tonnage of forest products is below that of a year ago. The road is optimistic, however, that the market will recover by the second half of'75 and is making plans to more efficiently fill the needs of its shippers. For example, UP has responded to the Western Wood Products Assn's. call for boxcars with an inside length of 52'6". Recognizing this need, UP included 500 of these cars in its 1974 equipment program and anticipates building several hundred more of them in the next few years.

As forbidding as the energy problem is, the situation is a plus factor in the railroad industry's outlook. Economists generally agree that trains present the most fuel-efficient ground transportation for most products. This potential for efficiency in an energy starved world has improved public attitudes toward railroads.

The railroad industry faces very stiff labor negotiations during the next few months, but UP is hopeful that, as was the case with the present contract, the negotiations will be concluded without a strike or even the threat of one.