Recovery has begun

By Thomas R. Ingham, Jr. Vice President-Marketing Simpson Timber Co.

lN spite of low- Ier interest rates and the stampede of the bulls on Wall Street, SimpsonTimber Co. maintains a guarded outlook for homebuilding and its dependent industries in 1983.

We have selected a conservative approach to 1983 planning and are forecasting 1.2 million new home starts next year. While that represents ab ot a 20s/o improvement over the current year, it remains a very weak level of activity.

have declined dramatically and mortgage rates are down some, not much else has changed. The supply of lendable money is a question as savings and loans are still struggling. The economy generally is still very weak and recovery from the recession is likely to be slow and gradual.

Although we don't look for interest rates to return to their record highs, neither do we expect them to continue the recent rate of decline. The federal deficit will continue to (Please turn to page 33)

Story at a Glance

Stimpson

(Continued from previous page) the Department of Housing and Urban Development are already showing sharp gains. On an annual basis, applications in the last half of September reached 576,000, compared with 183,000 in the same l98l period. October figures were running at an annual rate of 745,000 applications, representing about half of total residential loans.

Even for retailers whose businesses are not based on sales to the new home market, these figures should be good news. A healthy new home market has a multiplier effect, reaching into the markets for remodeling and over-the-counter sales. In a favorable housing atmosphere, lenders are inclined to be more reasonable about remodeling and renovation loans. And many new home owners start improvements to customize their dream homes.

Remodeling and the shoulder trade are important at all levels of the wood products manufacturing and distribution chain. The regional and products associations affiliated with the National Forest Products Association have produced many selling aids aimed at the home improvement market. Most of these publications are listed in the compendium published by NFPA, which includes order forms.

The brightest spot in the forecast is a substantial improvement in the West. We expect starts in the West to increase from an estimated 215,000 in 1982 to 310,000 in 1983. That means that 47.590 of the total national increase will be in the West.

Although short term interest rates

Wesl to get almost half of the 20oh expected increase in housing starts . . . lendable money supply a question . . more repair & remodeling smaller housing market in the '80s.