Small Western lumber gains

By H.A. Roberts Executive Vice President Western Wood Products Association Portland. Or.

ECAUSE Western

Iumber's top customer-home building-is expected to improve only moderately from three consecu- tive terrible years, we can only look for slight improvement for our industry in 1983.

But, softwood lumber consumption is expected to be up 8.890 from projected 1982 levels to total 31.7 billion board feet.

million units. In comparison, 1982 should finish just under l.l million units. Looking back at past housing performances, some l. I millionunits were constructed in 1981. During 1980, some 1.3 units were built and in 1979, our measure of a "normal" year, 1.75 million new homes were constructed. To reach the 1.3 million units we are forecasting for 1983, general improvement must continue in the U.S. economy, interest rates must drop to a level the consumer can afford or qualify for, and consumer confidence must improve.

There seems no doubt that demand for building supplies will be improved in 1983 over '82 by at least 2590. Repair, remodeling and renovation will consume increasing amounts of products and those manufacturers and distributors concentrating on this segment will be well rewarded.

On sitenew home construction will be slow to gear up with developers and financial institutions adjusting to the new money atmosphere. Higher priced custom home building will roll right along just as it always does, but the big surprise could be in factory andlor mobile units going to the newly-retired market. We see

A look at the industry as of this late-October writing finds year-todate production to be 72s/o of normal, lumber orders at 7390 of normal and shipments at 7 ls/o of normal. For the same week in 1981, year-to-date figures reveal production at 8l9o of normal and orders and shipments at 7990. We expected 1982 to start slowly and rebound as it has in later months. Some may recall that just the opposite happened in 1981, when the year began at a relatively better pace and dropped off significantly in later months.

Recently the Western lumber producers saw their highest volume order week in some 16 months as orders tallied a90v/o of normal showing. Signs that industry may be picking itself off the bottom may be showing. Hopefully, the recovery for 1983 is beginning in the late stages of 1982.

While housing may not lead the way, it will be an important factor on the road to economic recovery. Home building should start the upcoming year at a 1.2 million unit pace and finish at a 1.4 million unit pace. When all figures are in on 1983, total housing starts should reach l.3

On a volume basis it would take I1.42 billion board feet of lumber to build our projected 1.3 million housing units. While that is well below the l6 billion board feet consumed by the housing market in our "1979normal"year, it would result in an increase of the projected 9.71 billion board feet that housing should consume when final 1982 numbers are tabulated.

All of our other markets show increases in consumption in 1983, compared to 1982 projected totals. Repair and remodeling should partially rebound, as a decline in interest rates will tend to encourage larger projects.

What we've seen in looking at the statistics is quite sobering, albeit 1983 should show a slight improvement. In the longer run, however, (Please turn to page 33)

Story at a Glance

Repair & remodeling will re. bound housing will hit 1.3 million units. other markets will be up slightly . . . board footage consumed will be up.