Continued growth in '88

By Gary D. Schlaeger Vice President Forest Products Burlington Northern Railroad

I f tS HARD to conceive a more I dramatic economic event than "Black Monday," the Oct. 19th record drop in the U.S. stock market. Fortunately, what happens on Wall Street does- n't necessarilyrule the economy. The stock market is an im- perfect forecaster of economic activity. In the words of noted economist Paul Samuelson, "Wall Street has predicted nine of the last five recessions."

After effects of the stock market decline may be slower spending by the consumer and a reduction in capital. expenditure programs, but lower lnterest rates will help restore confidence as 1988 unfolds.

Our economy has its problems with budget deficits and imbalance of trade payments, but it also has shown remarkable strength for almost five years. We believe the

Story at a Glance

Economy will grow but at a slower rate... 1.5 million housing starts. . . lumber consumption off 34o/o... higher prices for products and transportation.

economy is sound and, since 1988 is an election year, it will continue to grow but at a slower rate than in 1987. The risk of a recession will increase sharply in 1989 as a weaker U.S. dollar causes a rise in prices and inflation and federal spending cuts enforced by the Gramm-Rudman bill further reduce a stimulus by government spending.

U.S. housing starts in 1987 will be about 1.65 million units and are assumed to decline about l0% to near 1.5 million units in 1988. Mortgage interest rates are expected to average 50 to 100 basis points above the 1987 level as fears ofinflation increase. Also, as the "baby boom" generation gets older, family lormattons are slowing and shelter demand is reduced accordingly.

Single family construction. which has been 1987's bright spot because of'trade-up demand, will bear most o_{ the industry's decline. Regionally, all sectors of the U.S. will show lels new home construction with the Northeast and California markets being the most active. followed bv the Midwest and South. Repair anil remodeling spending again will be strong in 1988 as homeowners repair and expand instead of moving. With vacancy rates averaging 60/o for industrial buildings and l-60lo for downtown oflice space, industrial. commercial and office construction will remain soft in 1988. Lumber consumption is assumed to decline 3-40/o to about 48 billion bd. ft. in I 988.

G-P & USP Units Integrated

By Jan. 1, 1988, the 20 distribution centers and 24 shipping points acquired by Georgia-Pacific from U.S. Plywood will be fully operational as G-P facilities.

Georgia-Pacific will expand its 142 branch distribution system to 154 facilities, according to George A. MacConnell, senior v.p., distribution division.

Georgia-Pacific's distribution facilities will now include 138 full line distribution centers, l2 specialty sales and distribution centers, 3 mobile home/manufactured housing distribution centers and 2 satellite warehouses.

Two U.S. Plywood facilities will become full line distribution centers to service G-P's customers in the St. Paul, Mil., and Mansfield, Ma., areas.

Ten U.S. Plywood facilites will become specialty sales and distribution centers servicing the geographic sales territories of several G-P full line distribution centers.

The establishment of l2 sPecialtY sales and distribution centers, MacConnell added. will allow G-P to grow rapidly in many value-added product lines that require specialized sales and service capabilities.

These centers will be Farmingdale, N.Y.; Philadelphia, Pa.; Alexandria, Va.; Atlanta, Ga.; Birmingham, A1.; Columbia, S.C.; Hillsborough, N.C.; Arlington, Tx.; Cincinnati, Oh.; and Tampa, Fl.

G-P's Providence, R.I., facilitY will become a specialty sales and distribution center servicing southern New England. The existing G-P facility in Mira Loma, Ca., will round out the company's specialty centers.

Two USP facilities, Harrisburg, Pa., and Lake City, Fl., will join with Georgia-Pacihc facilities in Elkhart, In., Birmingham, Al., and Riverside, Ca., to become distribution centers for the mobile home/manufactured housing industry.

Birmingham, a specialty sales and distribution center, and Riverside, a full line distribution center, will double as mobile home/manufactured housing centers.

In the Western region, two USP facilities, Missoula, Mt., and Tucson, Az., will become satellite warehouses of existing G-P facilities.

Twenty-two U.S. Plywood facilities. 19 of which were shipping points, and four Georgia-Pacific facilities will be integrated into other locations within their geographic areas. The USP facilties are: Vernon, Ca.; Tustin, Ca.; Shreveport, La.; Houston, Tx.; San Antonio, Tx.; Corpus Christi, Tx.; Hilliard, Oh.; Louisville, Ky.; Mishawaka, In.; East Hartford, Ct.; Portland, Me.; Cranbury, N.J.; Allentown, Pa.; Seaford, De.; Greenville, S.C.; Charleston, S.C.; Statesville, N.C.; Kinston, N.C.; Roanoke, Va.; Miami, Fl.; Orlando, Fl.; and Tallahassee, Fl. The Georgia-Pacific facilities are: Waco, Tx.; Colorado Springs, Co.; Sherman. Tx.; and Albany, Ga. USP's Denver, Co.; Mobile, Al.; Nashville, Tn.; Richmond, Va.; and Phoenix, Az., branches remain oPen and are an expanded part ofGeorgiaPacific. Lumber Sales Central in Eugene, Or., will continue to operate as it has in the past.

Future Dates

Check our Calendar on page 20 lor information on upcoming conventions, meetings and trade shows in your region.

Boise Cascade Sells the Last of Their Retail Stores

Boise Cascade Corp., Boise, Id., has sold its 2O-unit retail building materials division for $37.5 million to a new company, BMC West Corp., Boise, comprised of top management of the division.

In selling the last of its retail stores, which in 1980 had numbered 101 outlets, Boise Cascade takes another step away from the lumber business and nearer to the paper industry. The firm still retains nine wholesale building material distribution units.

Donald S. Hendrickson, formerly general manager of the building materials division, led the purchase and will serve as president of the new company. He was assisted by other members of the management team and the private investment firm McCown Deleeuw & Co., Palo Alto, Ca. McCown principal George McCown had been Boise Cascade building materials division senior v.p. before founding the investment firm in the early 1980s.

BMC West Corp. plans to continueoperating the stores as usual, just rechristening stores BMC West.

The division employs 770 and has annual sales of over $150 million, according to Doug Bartels, Boise Cascade communications director.

Included in the sale are retail stores in Boise, Emmett, Idaho Falls, Pocatello and Rexburg, ld.; Layton,

The Merchant Magazlne

Murray, Ogden, Orem and Tooele, Ut.; Aspen, Buena Vista, Eagle and Steamboat Springs, Co.; Healdsburg, Merced and Rohnert Park, Ca.: Bellevue and Tacoma. Wa.. and Beaverton, Or., and a truss plant in the Salt Lake City, Ut., area.

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

Zarkin

(Continued from page 9) modification of our lines of merchandise and strong improvement in customer service will make the difference for HomeClub.

Difficult economic times, slowing housing starts and concerns about a possible recession will force the current home owner to stay in their present home. Past experience shows that they will in turn fix-up, add-on and dramatically modify their dwellings. They may eliminate the middleman (the professional), opting to do it for themselves. HomeClub is uniquely positioned through its purchasing mode and service level to equally satisfy the amateur and the professional.

In non-building materials and lumber categories, our continuins softening of the mix of merchandis6 that we offer will enhance the total do-it-yourself shopper (men and women) making HomeClub truly a destination shopping experience. . In summary, most companies view themselves against last year. Being a very new company, onlyfour years old, we are conhdent that the best years are yet to come and are not concerned with what took place in the past, but rather with what op- portunities there are in the future-

We feel strongly that HomeClub is well positioned to deal with the opportunities no matter what the economic climate really turns out to be.

Brenda Baguley Betsy Bendix

Mary Lou Briseno

John Brown

Ricky Chambers

Billy Green

Scotty Halliday

Jim Hand

Bob Hershman

Jim Hynick

Mike Johnson

Curt Karstrom

Donna Lamberson

Jim Lawson

Mike Maddock

Bobbv Malone