Wood markets are changing

By H.A. Roberts President Western Wood Products Association

llt HILE MARKETS for sortUU wood lumber should see changes in 1986, western mills can expect U.S. lumber demand levels to be near those experienced in 1985.

Total softwood lumber demand in 1986 is forecast at42.655 billion board feet, down modestly from the estimated 43.075 billion board feet mnsumedin 1985.

Imports from Canada are anticipated to supply 14.2 billion board feet to the U.S. market in 1986, down from a record 14.4 billion board feet estimated in 1985. Domestic producers, who supplied 28.68 billion board feet this year, are expected to provide 28.46 billion feet to the U.S. markets in 1986.

Part of the decline in consumption will be a reflection of fewer housing starts in 1986. WWPA is forecasting housing starts next year to total 1.65 million, down from 1.7 million estimated for 1985. Lumber used in residential construction should decline to 15.75 billion feet in 1986, compared to an estimated 16.25 billion this year.

Other markets for lumber, however, should improve in 1986 and offset the losses ifl residential markets. Repair and remodeling usage should rise from an estimated 11.44 billion feet this year to 11.73 billion feet in 1986, comprising26.60/o of total lumber consumption. The share of lumber used in repair and remodeling has grown steadily since 1978, when it accounted for only 19.690 of the lumber consumed.

As the U.S. dollar continues to decline in value compared to other currencies, export markets for lumber should pick up. After declining to an estimated 1.575 billion feet in 1985, lumber exports are forecast to increase 590 to 1.65 billion feet next year.

Non-residential markets should fall

Story at a Glance

Soltwood lumber demand ol 42.655 billion bf...slightly lower Canadian imports...1.65 million housing starls...better export market...WWPA will stimulate demand.

modestly in 1986 and lumber used in this category is predicted to total 6.575 billion feet, compared to 6.69 billion feet this year. Much of the weakness in this market rvill be centered in farm, offiee and manufae t uring consl ruction activity.

Slower growth in the industrial sector of the U.S. economy will be evident in the amount of lumber used in the materials handling category. Lumber used in this category is predicted to lall slightly to 4.33 billion ieer nexr year. Additional military buying and improvement in furniture and consumer products should almost offset declines in railroad and mining for the "other uses" consumption, which is expected to total 4.28 billion feet next year.

WWPA will continue its aggressive marketing program in 1986 ro srimulate demand for western lumber oroducts.

Tuft

(Continued frorn puge 9 ) changes in the tax code and a favorable affordability picture.

Renovation continues to be a growlh seclor in rhe consrrue I ion market particularly in the northeast where premium location considerations favor rehab. This segment off'ers opportunity to all sectors of the building industry because of the wide variety of projects undertaken from residential lvork to major urban development tracts. Although a 1590 gain is anticipated in this sector, a possible change in the tax code, the removal of the Investment Tar Credit, will delete a major underpin in the current renovation market and result in declines in activity from current levels.

The d-i-y market is also expected to remain strong. With 8090 of d-i-y projects undertaken lvithin two years ol' a house purchase and sales of existing homes at a record level 3.4 million, the foundation has been set for a continuation of the l29o annual growth of the d-i-y market that has been occurring for the past decade.

Compared to the past year of stability, 1986 will be the apogee of rhe current construction cycle and the beginnings of decline. As the economy continues its slorrdown, the conslruclion industry will be challenged by declining conditions. To grow and prosper, the building industry must adapt to the changing needs of the market and align itself with the growing challenge presented by new'technology that will transform the construction industrv as we know if todav.

SPECIALIZED TREATMENTS NOW AVAILABLE r Wolmanized Lumber r Heavy Oil Penta i Waterborne Penta

. Dricon Fire-Retardant

. Creosote

PRODUCTS AVAILABLE r Cedartoneo

. Landscape Timbers r Railroad Ties

. Poles

. Posts

. Dricon Fire-Fletardant Treated Wood r All Weather Wood Foundations-

. AWPB-FDN Stamped For information on quick sevice call the treating expetts