How long will the good times last? EATED WOOD

By Dennis Hayward Executive Director Western Wood Preservers Institute

lllf f,"n it comes to treated wood products, the question "How long will it last?" is a common one. The answer: select proper materials, install and care for them correctlyand they will last indefinitely!

"How long will the good times last" for the sale of treated wood in the commercial, residential and backyard markets? The answer: produce and select the proper materials, treat in strict accordance with AWPA standards, meet customer expectations-and they will last indefinitely!

As the century comes to an end, several factors point to a healthy, expanding market for preserved wood products:

Expanding Markets.

. Quality Assurance. A popular industry movement, using the CheckMark program to designate materials meeting ALSC oversight requirements, is underway to help ensure that treated wood structural materials reaching the market are treated to proper standards.

. Innovation. New preservative systems are being developed and introduced to meet specific consumer needs. Producers are using grade selection, stains, water repellents and innovative cutting patterns to provide upper end products that will be competitive in price, appearance and performance with other materials. AWPA is implementing a new "IJse Category System" of standards to help specifiers select the right systems and levels of treatment. Market Share. As the supply of naturally resistant species declines, treated wood's market share expands.

. Remodeling. As remodeling the "older home" becomes an increasingly popular alternative to the "new home," improvement projects such as decks and landscaping features that use treated wood are expanding.

. New Uses. The industry is moving toward expanding markets to help the consumer deal with risks of insect and decay. "Full home treatment systems" for areas of heavy termite threat and changing codes to require treated wood in framing "wet areas" prone to dry rot are examples of areas targeted by industry programs.

. Export Opportunities. While the expansion rate of the North American economy and quality of life may slow, much of the rest of the world will see major improvements. Expanding softwood use in these growing markets will include great opportunity for treated wood products.

Environmental Performance. The environmental awakening of the 20th Century will certainly carry on into the new millennium. The wood treating industry is prepared to meet the challenge to ensure products offered are safe for both the user and the environment.

Safe Products. An extensive review of the safety of treated wood systems is nearing completion by the U.S. EPA in cooperation with Canadian and state agencies. It is anticipated that these registration reviews, to be completed in 2000, will reinforce the prior findings that any risks associated with treated wood are far outweighed by the safety and benefits for use in everything from playground structures and picnic tables to structural applications.

. Environmentally Friendly. Over the last few years, government agencies have completed a number of research projects measuring actual environmental impacts of inplace projects. The studies, having now undergone peer review, will establish for the concerned consumer that treated wood can be used in even the most sensitive of environments without adverse effect on the ecosystems.

. BMPs. The western industry maintains its focus on enhancing the environmental performance of its products through expanding its Best Management Practices for production and use of existing as well as emerging preservative systems to better meet the goal of wood protection with minimum chemical exposures.

. Life Cycle Performance. Enhancing the full life cycle performance of treated wood, from treatment to disposal, are all part of the industry agenda. Efforts range from expanding the reuse of materials removed from initial service to developing technologies to enhance energy generation and chemical recovery and reuse in ultimate disposal.

. Global Impacts. Within the global focus on the sustainability of economic and environmental systems, wood offers the premier building materials with affordability for the masses, oxygen production from our forests, carbon storage in our products, low energy use in manufacture, recyclability and renewability. Treated wood adds long life to the list of attributes.

. Raw Material Supply. While the concern over future timber supplies is a shared one, the importance of making the wood last as long as possible and the fact that only a minor portion of all wood is treated, offer promise for the pressure treated industry.

In the overall scheme of building materials, treated wood is often viewed as a niche product. But our niches continually expand. The diversity of value-added products offers insulation from inflationary and market downturns not enjoyed by some materials. Currently we see modest concentration in the industry along with a significant spurt in capacity growth. Clearly the industry leaders see opportunity entering the new century-and expect that, like our product itself, with proper attention, the good times can last indefinitely.

How long will the good tirnes last? RDWOODS

By Paul Houghland Executive Manager National Hardwood Lumber Association

Busines, growth for the hardwood industry should improve slightly in the year 2000.

Economic srowth for the U.S. is forecast to be above 37o. Growth in Europe is expected to be stable at approximately 2Va. The Asian markets, overall, should remain stable, the recession slide having stopped.

These are all positive indicators with the potential of affecting hardwood lumber production and sales. There are, however, some signals indicating a slowing in the demand for and availability of hardwood lumber.

Housing starts in the fall of 1999 were down 5Vo from the fall of 1998. Nevertheless, starts remain strong when compared with recent years. One unknown factor that could dampen starts is mortgage interest rates. The Fed has hinted interest rates may increase after the first of the year.

Home repairs and remodeling are predicted to increase by 1.57o in 2000. In effect, a stable but not greatly increased demand for flooring, moulding, stairs, etc.

About 357o of lower grade hardwoods are used in manufacturing pallets. The plastic industry has initiated an aggressive campaign to gain federal tax credits for the production of "reusable pallets and containers." This accompanies an increase in the use of plastic pallets in recent years. While no significant increase in the use of plasticand a corresponding decline in the use of hardwoods-in the manufacture of pallets is forecast for 2000, it is an issue that could eventually affect the hardwood market.

The Clinton-Gore Administration's decisions to close national forests to the harvest of timber affects the market in two ways:

(l) As the availability of timber from public lands is removed, the pressure on privately owned lands increases. Correspondingly, studies have shown that stumpage costs on private lands increase as public lands are closed. An increase in production costs then follow.

(2) Increases in domestic stumpage prices encourage increased imports from foreign markets in competition with American hardwoods. The result is a squeeze on the profits of domestic firms.

With all of these elements in the mix-stable economies, housing starts, interest rates, availability of product, etc.-2000 is expected to be a year in which the demand for hardwood products will remain strong, but profit margins will be tested.