Western lumber outlook brighter

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

A;"3'3.:15feet, consumption of softwood lumber produced in the United States in 1984 should move up moderately over 1983 levels. tmports, virtually all from Canada, should add another I1.6 billion board feet, thus giving Canada a 3l9o share in the U.S. domestic market. Total consumption: up 7.890 at36.6 billion board feet.

Housing, lumber's principal user, can be expected to move to I .7 million units in the year, well over the 1.6 billion unit outcome that now seems likely in 1983. Clearly, the early 1983 pace has decelerated, but the numbers are higher, the recovery more mature, the outlook brighter.

If housing is lumber's big user, it is also lumber's "wild card." Fluctuations in usage for residential construction have recently ranged between a high of 18.6 billion board feet in 1977, and a low of 9.5 billion board feetbarely half the'77 rate-in 1982. Demand in the coming year should reach 15.0 billion board feet,9.8 9o over the 1983 pace. Western softwood's share in the market: fractionally higher at 46.30/0.

Story at a Glance

Lumber consumptaon to increase 7.8"/o .. . housing moves to 1.7 million units... secondary markets hold steady. mortgage rates near 12o/o business on upswing.

The secondary markets, repair and remodeling, non residential construction, and materials handling, have been steady by comparison. In the aggregate they still represent a "heavy half in total domestic softwood consumption, and will do so again in the coming year. The Western Wood Products Association now forecasts improvements in all four segmentsand in an "all other" category that includes military defense.

Housing analysts have been surprised by the home buyer's willingness to live with 12 and l39o mortgage rates. That fact more than any other has fostered housing's recovery. That's the good news. However, these same rates also limit the magnitude of the recovery-and that's the bad news! We do not see mortgage rates dipping very far under l29o in 1984. Nor do we see housing reaching the 2.0 million unit level anytime soon. Federal deficits are still menacing. Moreover, business activity is finally on the upswing-good news with at least a nuance of the negative. Federal Reserve Board Chairman Paul Volcker recently told the Senate Banking Committee's subcommittee on economic policy that "rising private credit demands in reflection of increased business activity are beginning to clash with the heavy financing