Pressure treated sales slowdown

By Chad Niedermeyer President Western Wood Preservers Institute

AnfEn having increased

Fl almost 6000/o from 1975 to 1985 and becoming the fastest growing portion of the lumber industry, sales of pressure treated wood are expected to hold in 1986 at the record breaking level of 1985.

In 1985, totals kept by American

Wood Preservers Bureau (which are estimated to represent 650/o-700/o of total industry sales) showed lumber sales of almost 2.8 billion board feet. This was 0.6 billion (or 270/o) more than in 1984 and 0.2 billion (or nearly 80/o) more than was forecast for 1985. Performance like that needs to catch its breath eventually, and it looks as if that's what's haPoenins this vear. '

Th6re ar6 a lot of pressures for continued growth, and it's reasonable to expect pressure treated wood sales to resume growing, beginning in the second quarter of 1987, but at a more modest pace. The AWPB total should approach 3.0 billion board feet.

Through September of 1986, AWPB figures for plywood sales show an increase of almost I l0lo over the same period in 1985. Assuming no radical difference in the respective fourth quarters, plywood sales should reach 60 million board feet by year-end. Plywood can be expected to continue as a healthy growth seg-

Story at a Glance

Treated wood sales catch breath after record breaking growth... 1987 sales expected to continue at slower pace. Western market bet' ter than national as a whole.

ment in 1987, perhaps reaching 63 million board feet, because of increasing usage in new residential construction, remodeling and for industrial uses. Sales of foundation lumber and plywood are both down in 1986 as the industry has softened its emphasis on the Permanent Wood Foundation. For this relatively small segment, we might expect 1987 sales reported bY AWPB to be on the order of 13.3 million board feet of lumber and 17.2 million square feet of plywood.

The slowdown in growth of pressure treated wood is a reflection of uncertainties in the economy as a whole. The slowdown should be onlY temporary, however, since the same factors that have been encouraging srowth are still at work.

- Builders continue as an important element. Consumers are increasingly aware of what pressure treated wood can do for them. Treaters and industry groups like Western Wood Pro- ducts Association, American Plywood Association and Western Wood Preservers Institute continue to work with lumber dealers, educating salespeople and resassuring consumers on EPA safety issues. Retailers continue to promote pressure treated wood and are selling it better in a yearlong market.

The outlook for pressure treated wood sales nationwide is promising overall. For the Western U.S. the outlook is a little brighter as all market forces continue to take advantage of opportunities in both residential and nonresidential markets.

Slow Sales Growth In 1987

Sales growth of goods will lag during 1987 as consumers pause from their torrid spending pace begun in 1983 with retailers mirroring these unimpressive results, says James Newton, president of Economic Perspectives, Inc.

For example, lumber yards should post an inflation-adjusted sales jump of about 180/o in 1986 with 1987 anticipated sales improvement plunging to about 2o/0. Home supply stores will also slow from the 1986 pace with real sales growth of about 3ol0.

Newton bases these predictions upon the assumption that the U.S. economy will continue along its slow growth path through the end of 1987. He forecasts a short and shallow recession by 1988.

New O'Malley Charge Card

O'Malley Lumber Co., Phoenix, Az., is establishing a private label credit program from Bencharge Credit Service for customers at its 18 stores in Arizona and Texas.

"The program provides us with our own in-store charge card and also administers all our billing and collection procedures. Our customers receive a higher credit line than most bank cards, and we have the convenience of dealing with a local office, " said Jim Sullivan, O'Malley's director of credit.

More retailers are using this type of credit to enhance their image, promote cross selling and build customer loyalty, according to Richard Klesse, vice president, Bencharge Credit Service.

Posts, poles, pilings, timber, crossarms, grapestakes, dimension lumber.

Pacific Wood Preserving of Bakersfield produces virtually all pressure treated wood products. And, with computerized inventory control, Pacific Wood Preserving of Bakersfield offers accurate and complete service. A single phone call can put this complete capability to work for you. Call today:

Steve Ryan, General Manager

In California (800) 582-3950

Outside California (805) 833-0429 mFire Retardant-Treated Wood U.L. Approved

HEAVY OIL PENTA WATERBORNE PENTA CREOSOTE AWPB.FDN STAMPED for Quality Control