A Year of Reduced Demand

by Howard C.A. Hunter Director. sales & marketing Lumber & Plywood Div. St. Regis Paper Co.

flt E view l9- IU 80 building activity with a great deal of uncertainty. It seems to us that it will be a year of reduced demand because of economic and nolitical factors.

Assuming that the present conservative monetary policies are continued, housing starts could easily fall below the lry' million level. Prices will increase slightly horvever because of cost push and reduced production levels by mills dependent on public timber.

After 1980 we see a very favorable five to seven year period with the traditional cyclical behavior of housing starts Iess dramatic than in the 70s. Prices will exceed inflation each year as a result of the demand/ supply imbalance and a continued cost push.

Heavy Canadian stud production will continue to hold down price increases for that product line. The dollar ratio is expected to gradually narrow as the decade unfolds.

Regionally, the mid-South and West Coast building pace will be stronger than the national rate and should offset the loss of Midwest and Eastern markets to freight cost increases.

The trend by large corporations

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Story at a Glance

starts, higher prices

West stronger than rest of U.S.... heavy Canadian stud production will hold down price increases for that product line. majors will increase their role in distribution.