Railroad's Role Gontinues Strong

?HERE WAS

I much pessimism about housing starts and building material sales at this time a year ago, much of it based on political uncertainty. However, we decided to accept the odds and predicted a sharp rise in housing starts in 1977 Io at least 1.75 million and probably around 1.8 million. As it turned out, we were conservative.

Today, with the same political uncertainties and pessimism, and talk of potential disintermediation, I see about the same near-record demand continuing. There should be at least 1.8 million and possibly 1.9 million new starts in 1978, plus a noticeable increase in big-ticket sales for major remodeling of old houses that are within energy-saving distance of the downtown core.

Supportive facts again far outweigh the pessimism. The postwar baby boom is just now becoming a large population group ready, anxious and able to become buyers of homes, both new and existing.

The 25-44 age group will expand an average of nearly I million people annually through 1980. And another baby boom is in the making, meaning need for larger homes and continuing high demand in our business. Those people are here now, and they're buying.

With this we have another growing group, the empty-nesters with child-

Story at a Glance

At least 1.8, possibly 1.9 million housing starts in '78 . . more big ticket remodeling sales population mix means more home buyers in years to come artificial timber shortage must be corrected at federal level.

ren gone, now ready for smaller homes or apartments. Because of this, I see a somewhat larger volume of apartments in the 1978 mix. From 25% of starts, these will move up to about 30%.

This also means a big year for single-family units, in which the West will share, of about 1.3 million houses. Our data now indicates total demand each year through 1980 ranging between 2.1 million and 2.3 million new units including mobiles.

The West also will share what is becoming a national problem, an artificial shortage of timber amidst plenty. In fact, the Western states will have more than their share of this problem because federally owned commercial timber dominates in the West, and it is the withholding of federal timber from the market that has closed mills and raised timber prices dramatically while billions of board feet die unharvested on the stump each ,vear.

As a result we are already some Southern pine used West despite transport costs.

seerng in the qOIITHERN Pacific will continue 9to play a critically important role next year in transporting the lumber and forest products needed for homebuilding and commercial construction in its 12-state service territory.

That is the price of allowing environmentalist pressure on Congress for more million-acre roadless wilderness setasides to continue. In dollars, a recent government timber sale means $415-a-thousand raw logs delivered at the mill. Translate that raw material cost into the finished plywood, lumber, particleboard and hardboard on dealer floors or the construction site. The exorbitant windfall profit that environmental groups are generating for the U.S. treasury from government timber sales translates into the need for more people writing, wiring and phoning their legislators.

With 250 million acres of forest lands already barred, a third of all the nation's forest lands, it's obvious that timber processors do not have the numbers to block this environmental overkill.

Only the combined grassroots clout of building materials merchants, builders, their customers and other concerned citizens everywhere can glve legislators the needed shock treatment into sanity.

Recent innovations in Pricing, scheduling and equipment have enhanced Southern Pacific's long-standing partnership with the lumber and building industry, whose need for efficient long-haul movement of heavy tonnage continues to be a major source of SP's railroad revenues.

Story at aGlance

Rail movement of forest products from the Pacific Northwest expected to match this year's level, though environmental problems may raise havoc with that projection SP spending has upgraded Oregon Div.

Industry analysts expect movement of forest products to these markets from the Northwest to match this year's healthy level during the first half of 1978, although the uncertainties of environmental actions have left producers hesitant to issue forecasts for the second half of next year.

But whatever the level of next year's business, SP will be well suited to handle it. During 1976,the railroad spent $8millionover and above normal maintenance expenditures to improve service on its Oregon Division, which serves the lumber-producing regions of Oregon and Northern California. The program of new rail and tie installation, tunnel upgrading and improvement of bridges, trestles, culverts and other structures on SP's Northwestern properties has left the railroad in prime shape to handle increased busiNESS.

SP's expedited schedules from Oregon to the consuming markets in other states have won praise from shippers for their dependable timeli(Please turn to page 14)