1978 California Construction Outlook

By Dr. Shirley A. Stephenson Assistant Vice President Public Affairs/Research Dept. Security Pacific National tsank

cast period. Similarly, net in-migration to California is expected to remain near the 1976 ten-year high over the next few years.

The 1978 housing forecast for California is predicated upon these fundamental demand factors coupled with such supply factors as: (1) ample supplies of mortgage and construction funds available at the state's thdft institutions, (2) little significant change in mortgage interest rate levels; (3) increased consumer purchasing power resulting from a "real" personal income gain of approximately +%; @) continued moderation of inflationary pressures; and (5) slight increases in vacancy rate levels.

The 197'7 single-family housing forecast of 169,000 new units and the 1978 prediction of 124,000 new homes represents a significant adjustment on the part of developers to the removal of the speculative craze that characterized the single-family housing mar' ket in late 1976 and early 1977. Moreover, the 1918 moderation represents a return to a more sustainable level of single-family housing production rather than a decline to a subnormal year. While both cost and availability of mortgage funds (Please turn to page43)

Story at a Glance

Fundamental demand factors to support high home building activity, 124,OO0 units in Calif. next year . moderate rise in multi-family units. .increased nonresidential construction, with permits up 12%.

John Ferri Robert O'Neill

llf LUS perf centage figures of single digits seem to apply to all face veneers and walnut lumber results for the year to date. One might term this picture so far as "a case of the blahs". record is on the plus

By Donard H. Gott

small. Gun stocks declined. Why? Opinions vary from cost of transportation to and from the hunting grounds to a seemingly sharp decline in hunting license applications. Some even say it was a good year for the birds.

And now tbr the crystal ball gazing for 1978.

Conservatively speaking, we believe next year will be relatively better by about the same single digit percentages. The many uncer- tainties on the government and political horizons, ie, energy confusion, inflation rate, more and more governrnent regulations, and labor demands make it virtually inrpossible to prognosticate in a more optimistic vein.

Our forestry program, under the able directorship of Larry Frye, continues strong, particularly via the tv and radio exposures. Larry's messages to the private land owners are getting across, as the denrand for our planting and forest managernent literature has been the heaviest. For the sixth consecutive year, all l4 state nurseries to whom we supply well over 31,4 million unhulled walnuts annually were in an oversold condition on their I year old walnut seedlings this past spring. This is certain proof of the effectiveness of Larry's radio and tv nlessages.

Story at aGlance

More single digit percentage increases seen for hardwood face veneers and walnut lumber surveys continue to indicate consumers prefer the natural look in wood uncertainties in energy, labor, government and inf lation cloud '78 picture.

On the prornotional side, character marked wood took center stage. A very successful seminar was c0nducted in Jasper, In., for the rnany cabinet, furniture and woodworking companies. Designers and purchasing agents from nearby television manufacturers were also among those present. The Hardwood Manufacturers Assoc. and FH-AWA were co-sponsors.

For a consumer survey, two identical four-drawer night stands were manufactured from solid American black walnut; one in clear wood, the other in character marked wood. During a four week period, consumers from all over the Unites States saw the display. 4,398 responded: I ,71 6 selected the chest in the clear grade, whie 2,682 families cast their vote for the duplicate piece in character marked woodan approximate 70% preference for the natural look. Furniture designers take notice!

Our new free booklet on character marked wood has been distributed to over 7000.