Canada to Affect US Lumber Prices

Richard P. Neils Divisional Director of Marketing Lunrber & Plywood Division St Regis Paper Co.

Eview

1978 prospects as being slightly less favorable than 1977.

Despite what appears to be a healthy demand for housing there are several factors likely to depress home construction next year. Shortages of insulation, plumbing supplies, and skilled labor will slow down completion of active projects. Recent trends in money supply make increased interest rates almost a certainty.

However, the sheer momentum of the Summer and Fall of this year should result in favorable markets the first half of the year with an expected falling off in the third and fourth quarters.

We see a continuing trend toward large distribution outlets serving industrial. contractor. and rural retail yards. Expect business in the Rocky Mountains, Southeast and Southwest to be the strongest of the regions, with definite weakness continuing in the Northeast.

Canadian lumber production volume will be an important factor in determining the price levels of the domestic marketolace.

nrental hand-outs were not needed this past year to experience a tremendous growth in housing. Residential building should renrain at that high level in 1978 with perhaps a slight increase. More sales, nrore volutrte, because the denrand is there.

The energy problenrs of the nation will be with us for sorne tinte and. in spite of unavoidable shortages of certain products, primarily due to demand, the production and sales levels of weatherization products should reach record levels in the years ahead.

It's time fbr us, as an industry. to show that economic considerations regarding land use and resource use are as equally inrportant as environmental considerations. The public is ready to be convinced. The industry, with soure ingenuity, can prove such a position, and from our efforts, all can benefit.

It has been years since the businessrrran had a major role in initiating substantive changes in our tax system. 1978 will afford us that opportunity.

All-in-all, the econonry seerns to be gaining strength and should continue that pattern over the next 18 nrorrths. Our industry is healthy and llourishing and should n.raintain that status during the same tinre period. 1978 will be a year of real opportunity. If we use our "American ingenuity" we should, and can, set the stage for growth and success well into the.80s.

The trend toward truck shipments will continue despite the efforts of the railroads in establishing superincentive rates.

Export activities will be minimal and will not absorb anv sicnificant amount of domestic production.

We look for a relatively strong 1978 unless the rnoney supply dries up completely.

Story at aGlance

Home construction likely to be depressed material and labor shortages present momentum should mean good 1st half in '78 . . . more large distribution outlets amount of Canadian lumber imported will affect prices more truck shioments.