The 1979-80 Wood Products Market Outlook

By the National Forest Products Association

I N 1979, for the second straight ! vear. the markets for wood produits have held up bettter than most forecasters had exPected.

More than 1.7 million housing units will have been started bY the end of the year, down from 2.0 million units built a year earlier but better than the 1.5- 1.6 million units that were projected. The levels of both years are attributable to the expanding use of secondarY mortgage markets and the sixmonth money market certificates that have eased the thrift institutions' dependency on Passbook accounts. These alternate sources of mortgage funding have responded to the demand for housing from a growing number of household formations.

Record volumes of mortgage lending commitments are certain to forestall a collapse of homebuilding before the end of the Year desPite recent moves to tighten the moneY supply.

The Federal Reserve Board's October 6, monetary actions sent shock waves through the entire economy with impacts that are still being assessed. On that date the Fed announced an increase in the discount rate to a record l2tth, an increase in bank reserve requirements and a change in the method of monitoring growth of the moneY supply.

The moves are aimed at reducing demand for credit and slowing inflation. Because new mortgage credit is the fastest growing use of credit in the economy, having srown from about 20 billion dollars in 1970 to 101 billion dollars annual rate in June, 1979, it is clearlY a blade in the inflationary fan the Fed is trying to slow.

If the current tight money PolicY is sustained far into 1980 there can be no doubt that the year will be a

(Please turn to Page 70)

should ease tight moneY policy somewhat. .. 1.45 million housing starts with 72o/o ol the total singlefamily homes... industrial production will remain flat.

E SEOL-OIA SL-PPI}- JF r.u. ,,fi w ' z>vDlttmer trq. ' -rarr'erq' wv. v+>rt .- Dialing from California: (800) 862-4613 or (7071 864-t7ll

SEASONS GREETINGS

IHRICE-ll0tl0REll at national distributor meeting was the Palmer G. Lewis Co., for significant activity in building materials distribution. From l.-r.: S.M. Van Kirk, founding executive director ol National Building Material Distributors Assn., Richard E. Lundgren, president, PGL, and oresident-elect ol NBMDA; Palmer G. Lewis, chairman of the board emeritus of PGL, Robert D. Peterson, chairman ol the board, PGL; and Robert E. Martin, NBMDA president.