Housing and d-i-y revive panel market

By Bronson J. Lewis Execulive Vice President American Plywood Association

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Plywood Association, 1983 has been an exciting time. The housing market began to perk. Other markets continued to shine and the industry 85 .,!' started to regain its health. We see an increasingly bright outlook for the structural panel market in 1984 and over the next five years.

APA's market research and economic services div. believes that under the best circumstances, with an easing of short-term interest rates and subsequent moderation of mortgage rates, there could be enough housing activity to generate starts at the 1.7 million plus level in 1984.

However, the association believes that even if interest rates are less favorable and housing starts are at a lower level, the 1984 election year influence has the potential to help the industry surpass 1983's strong performance. Our estimates for total U.S. structural panel demand are for 20.2 or 20.3 billion square feet in 1983 and about 21.9 billion feet in 1984.

In 1982, new housing consumed 3090 of total structural panel production. This year it will be closer to 40q0. Of the remaining 6090 , the largest segment is home repair and remodeling. This market has been a savior for our industry during some very tough times. And we fully expect home-

Sforyat a Glance

Possible 1.7 million housing starts in'84. . .structural panel use in '83 20.3 billion sq. ft., next year, 21.9 billion ft.... housing will use about 40% .8o/o-10o/o increase in repair and remodeling.

owner activities to continue to accelerate during the recovery.

People are starting to move to new jobs and buy used houses that are prime candidates for "personalization through remodeling. " Others are retrofitting for energy conservation. We shotrld see an 8-1090 increase in homeowner activity next year from a very strong base this year.

We continueto be excited about the future prospects for the PerformanceRated Panelprogram. With it, theindustry can continue to expand its product base, despite an ever diminishing and increasingly costly timber supply. New panel layups, thicknesses and species, plus the costeffective technologies for waferboard and oriented strand board will provide dealers with a continued full line of structural panels at a competitive price.

An educational job is ahead of us. Dealer salespeople needto know what to specify, how to read and use Span Ratings, where to go for detailed information and what applications are appropriate for these products. APA is geared to provide this education.

New literature and advertising are being made available. Field men will conduct meetings and training sessions to support this program.

Our enthusiasm for the future is based on the expanding market horizons we see. As the American Plywood Association looks to the future, dealers will continue to be critical to the success of the structural panel industry.

Distributors optimistic

By Frank E. O'Dowd Executive Vice President National Building Material Distributors Association

EACTS and f figures appear from all sides to confirm the dramatic rebound of the building material industry during 1983. Whether it was the turn around in new residential housing, the restored buyer confidence in home repair and remodeling, or the smiles on the faces of most of the nation's building supply retailers and wholesalers, the evidence was clear: a devastating three-year industry recession had faded away-and not a moment too soon.

In the light of this recovery, what about the future. What will happen in the year ahead? Will 1984 see a continued rise in building material sales? For a number of reasons, it appears that 1984 will build on the momentum that has been established in 1983. Nevertheless, one should be cautious.

The building material industry is not headed for the lofty levels and figures experienced in past years. 1984 will be a good business period for most, but financial pressures, while favorable now, can change and throw a "wet blanket" on an industry sensitive to interest rates and money supply. At the moment, both factors are favorable. Interest rates have been stable and may come down slightly through the winter months. A significant rise in personal savings has restored deposits to levels not seen in three or four years. Funds are available for new residential mortgages and for remodeling loans at rates many consider acceptable. This is confirmed by the inventory of both new homes and existing older homes decreasing during the third and fourth quarters of 1983. Like Mark Twain's death, the rumor about the end of the fixed rate home mortgage was greatly

Sfory at a Glance

Momentum will continue in'84 interest rates, money supply favorable. warehouse retailing to go nationwide... year of opporlunity.

exaggerated, and its return has made potential buyers more comfortable about the purchase ofhomes and condominium units.

Money has been discussed first in this forecast because, in the opinion of the writer, whether we are wholesale or retailers, homebuilders or remodeling contractors, our respective busi-

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