Housing gains will spur all wood markets

By William H. Stimpson* President National Forest Products Association

ARKETERS and manufacturers of wood products should be able to start catching up with the severely suppressed demand for their products in 1983, if forecasters are correct. While no one is predicting that housing will be at the record levels of the 1970s, indications are that home building will make a respectable rebound.

Virtually all forecasters for housing paint an optimistic picture, and this optimism is based on something more than wishful thinking. This time, all-important interest rates 4,'e lower. Housing starts sre uP. And manufacturers, wholesalers and retailers are gearing up for increased business next year. This atmosphere of cautious confidence is, in my opinion, well-founded.

Dependent as it is on long-term financial commitments, housing needs, above all, a stable economic climate, which now appears to be more than a possibility. There is continuing progress against inflation, a favorable outlook for food and energy prices and wage settlements, and a shift toward somewhat easier money by the Federal Reserve Board.

All of these positive factors are

Those parts of industrY PrePared to look to less traditional areas could be the ones to come out of '83 as the winners. We are going to be oPerating in a "fast track" world. That means having the right product in the right place at the right time. The builder could well be looking for non-traditional sources of supply as his lead times shorten up, i.e.,retail outlets.

There is an increasing pull towards two step distribution as more retailers see the value of going through a wholesaler. The benefits include fast turnaround on orders, single sourcing, better overall discounts and lesq need to carry inventory. Careful examination of gross return on margin investment often brings surprising answers.

The female consumer, long a strong influence on d-i-y purchases, is becoming an active participant in

/Continued on next Page) bolstered by the existence of the undeniable demand inherent in the so-called post-World War II babY boom bubble in the nation's population mix-a generation of potential home buyers who will need housing in the 1980s.

How much improvement can we expect in the next twelve months? The nation's forecasters are close together in their predictions for something more than l.3 million housing starts next year, a figure representing a 30v/o jump over this year.

Residential loan applications to (Continued on next Page)

Sfory at a Glance

Respectable rebound f or housing multiplier effect will aid retailers, esPeciallY remodeling and over'the' counter. .. HUD rePorts sharP gains in home loan aPPlica' tions.

Caldwell

(Continued from previotts page) the market. The DIY Research Institute estimates that 3890 of "home improvement and repair d-i-yers" are female.

1983 will see a growth in hardware retailing; forecasts vary from 2Vo over 1982 to as high as 1690. Somewhere in the 5-890 range seems a likely outcome. National Retail Hardware Association 1982 Marketing Surveys showed 7.2V0 of all hardware retailing outlets as feeling "very optimistic" about 1983, and 46.2V0 are feeling "moderately optimistic."

Every part of the industry-manufacturers, wholesalers. retailerswill be forced to work together, becoming partners in success. Competition at all levels will be leaner and meaner. We need survival management techniques-but there are opportunities in the market for those who are preapred to go after them.