Hardwood outlook improved

By S. Canoll White Executive vice president National Hardwood Lumber Assn.

lN spite of the lgloom and doom attitudes of many politicians and the negative emphasis placed on day-to-day economic statistics by the press, the facts are that the building blocks continue to fall strengthening U.S. economy.

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All of this is important to the hardwood lumber industry because it is well recognized that as goes the U.S. economy so goes our industry. There is no magic that affects the fortunes of our business. We are not dependent upon scientific breakthroughs and new technology for business improvement in the short term.

Story at a Glance

General strengthening of the U.S. economy will bolster hardwood markets . . . inven. tory re.building can be expected . . . spring ol next year could be a boom time for hardwood.

Among the multitude of hardwood products,the furniture industry is considered to be the great money crop for the industry since that is the home for the largest volume of upper grade material. Furniture is purchased with discretionary income and anytime that the consumer feels that his future earnings might be affected, adversely, he will postpone his purchases. The same pressures that are placed on the homebuilding industry by inflation and high interest rates affect the sale of hardwood adversely by restricting purchases to the building trade as well as to industrial users. Furthermore, if consumer items are not moving, the tremendous amount of hardwood required for the pallet industrY and railroadcrossties is reducedaccordingly. So with the general improvement in the economy that might be reasonably expected, we also might expect improvement in the volume of hardwood requirements in 1983.

As the U.S economy becomes more favorable and orders begin to pick up, furniture plants, flooring plants, and other industrial concerns will begin to purchase and rebuild inventories of rough material which it has not been reasonable to do for the past two or three years due to high interest rates and low sales volume. When this demand is passed on to the sawmill there might be some surprises in store for the purchasers and some scarcities could well develop because there are large gaps in hardwood mill inventories. The spring of '83 could be a real boom period in the hardwood industry.