SEASON'S GREETINGS

like a good bet with a chance of being above that range if multi's recover fast. Although the chances of an early falloff have declined, some weakening in 1978 should still be expected.

The outlook for several key markets other than housing is also favorable. Offshore demand is picking up and should increase .further as most of the countries in Europe, plus Canada, and Japan appear headed for continued economic recovery after an upsetting pause in growth this summer. As business operating rates pick up and investment is pushed higher, nonresidential construction markets will improve: and with real GNP and income growth averaging close to 5% for the year, furniture, home improvement and other nonconstruction markets look good.

Story at a Glance

Total production up 11% in current dollars, consumer prices will rise 5%% while employment will increase 2 million . . . new housing starts: 1.75 million . . . "pretty good year" for construction suppliers.

This translates into an overall wood products demand level 6-7% above 1916 and only 2-3% below the banner year of 1973. Let's not forget 1976 didn't turn out to be all that bad even if it was only the big recovery in single-family housing that provided the boost.

Route

Bor 459-A 7O7-'125.5L23

Fortuna, California 95540

In brief, 1977 looks like a good year with strong demand early in the year, with some leveling and probably falling off as we enter 1978.