A LOOK AHEAI)

Look for a pickup in demand for West Coast lumber in 1959. Every sign points that way. Even in the face of a threatened tightening of the mortgage money supply by interest rate manipulations, housing seems destined to show some increase over the 1,150,000 new starts marked up this year.

Some say new starts will jump about 6/o. For two years, output at Oregon and Washington fir mills has held close to 8 billion feet each year. This is something below the irnmedia_te postwar years, but is still a reasonably good volume. It should be better in 1959.

There has been an expanding use of odr west coast species in school and church construction, especially in the glue laminated Douglas fir and west coast hemlock beams and arches. More cedar and fir siding is being used on schools

Trends of 1959

Five new trends will become more pronounced in 1959, Colean predicts. They are:

1. Merchant builders will get a larger share of the single-family house market. At least 80o/o of. the profes- sionally-built homes will be merchant-built, Colean forecasts. Reason: the revival of FHA activity.

2. Prices will be slightly lower, despite rising costs. Increased private apartment building will keep average prices down because most apartment units are smaller ind cost less than a house. Many builders believe people want more lower priped fi6115s5-2nd so they will build them.

By H. V. Simpson Executive Vice-President

West Coast Lumbermen's Association and churches and more wood is being left exposed as architects strive for a friendly, warm atmosphere in public buildings.

Contemporary home design-open area with exposed plank and beam ceiling-has made wood the most popular construction material in the home. Builders, prodded by several national women's building congresses, are using more wood for interior finish in kitchens and for wall paneling.

Women expressed a preference for wood inside and outside their homes by nine-to-one over all other materials.

We believe the lumber industry should capitalize on this tremendous popularity of our maierials ancl give the public rvhat it rvants.

Business Men's Expectations For First Quarter 1959

Nearly three quarters of the 1,548 business men participating in Dun & Bradstreet's latest compilation of business men's opinions were optimistic about their sales prospects during the flrst quarter of 1959. With 72% looking forward to year-to-year gains, and only 4/o anticipating declines, the average viewpoint was more optimistic than in any such inquiry since that for the fourth quarter of 1955.

The downtrend in prices will not last, Co,lean adds. "If a 24/o fall in home building in two years (1955 to 1957) can't produce a real cost cut, it's doubtful that a two-year rise of the same size will do so . . . Although materials piices have eased off slightly, overall costs havJresisted the iecessio-n and actually climbed a fraction of a percent."

During the current questioning, business men were cheered by numerous reports that over-all business activity was steadily moving upward from the recession low of last April. A larger proportion of retailers expected year-toyear sales gains in 1959's first quarter than in any other major classification; three months ago this was the least optimistic of the four groups.

_ f; 5. Prefabbers will keep moving ahead, ihould mark up another good year. They did surprisingly well during th-e recession. Last year, they shipped 94,000 units and-they count on reaching 105,000 units this year. Next year, they should do still beiter.

3. Private apartment building will maintain its comeback and should climb to a levll near its postwar peak. Next ye-ar's total should hit 150,000 units-only about 10,000 short of the peak years of 1949 and 1950 wheh the ill-fated FHA Sec. 608 program produced a boom.

4.,,Public housing will continue to swing to single-family dwellings. About two-thirds of it will be-for miiitary peisonnel, mainly financed through FHA's Title VIII -Cipehart-program (which government statisticians classify as public housing despite FHA mortgages). Local public housing aqllhorities are also turning to one-family units.

A

Back.Look at 1958

_, Coleal expects private starts to reach 1,072,000 this year. Witb -6_5,00d p,ublic starts added, the total 'for the year 9lguld be 1,135,000 (vs 1,041,000 in 1957 and 1,118,000 in 1956).

- Big gains in apartments and public housing overshadow the increase in house starts. Colean figures apirtment starts will be up 1]% to 135,000 i public houiing "i Sl% to 65,000, and single-family house stirts up O% ti 900,ffi; and twofamily starts up 5/o to 35,000.

One of the nation's leading building economists predicts that construction activity in 1959 will hit a new all-time high for the 12th successive year but housing starts, public and private combined, will remain at about the 1958 level of 1,160,000.

Edwin W. Magee, Jr., associate economist of the F. W. Dodge Corp., construction news and marketing service, explained that his forecast was based on recent construction contract awards and the outlook for contract awards for next year.

Addressing an annual meeting of the National Lumber Manufacturers Association, Magee declared : "Construction contract awards are apt to rise 3/o next year to a total of $35,570,000,000. This would be on top of a 7/o rise in 1958 compared with 1957."

Residential construction, according to Magee, is one of the most difficult categories of building to forecast at this time. A tightening of the mortgage money market, making it difficult in many areas to obtain FHA-insured and VAguaranteed financing, should exert a downward pressure on home building during the early months of 1959, he stated.

At the same time, the new Congress is expected to take prompt action to pour more funds into the lending stream and the result should be a moderate upsurge in home construction during the second half of 1959, Magee emphasized.

, "With these factors more or less balancing each other off, we look for next year's housing starts, public and private combined, to show very little, if any, change from this year's expected total of about 1,160,000."

Contract awards for new residential construction next year will be down 2/o in floor area but up l/o in dollar volume, Magee told his audience of leading lumber manufacturers from all parts of the U. S. This is accounted for, he explained, by the prospect that apartment construction will represent an increasing share of new residential units while the cost of all residential building, reflecting higher price tags on materials and labor, will continue upward.

An industry study indicates that construction in the United States in 1959 will probably pass the $70 billions level for the first time in history. New construction alone will almost certainly exceed $50 billions and could possibly reach $52 billions, according to W. R. Wilkinson, vicepresident of Johns-Manville Corporation.

Current estimates indicate an additional $20 billions will be spent in 1959 on modernization, remodeling, mainten- ance and repair of existing structures, Mr. Wilkinson said. In his capacity of general manager of the J-M Building Products division, Mr. Wilkinson maintains 'continuing contacts with architects, industrial construction engineers and building materials dealers all over the United States. In spite of the recession, almost 19,000 more new dwellings were built in 1958 than in 1957. Alter a low first quarter in 1958, construction volume rapidly recovered, and in September and October new homes were being started at an annual rate close to 1,300,000 a year. Total new starts for 1958 actually will be close to 1,160,000 when final figures are tabulated, compared with 1,041,000 started in 1957.

Information compiled by Johns-Manville to date indicates that the number of new homes to be built in 1959 will come fairly close to 1,200,000, compared with about 1,160,000 in 1958, up about 40,000 new homes.

Single-family houses, which accounted for 80/o "i Llt^. new construction rn the residential category during 1958, will register a somewhat smaller percentage in 1959 but will be more than offset by an anticipated large increase in multi-family dwelling due to continuing strength in this type of construction. New apartment houses in 1959 may reach 190,000 or even touch the 200,000 mark the way demands are now shaping up.

"We are in an era in which the building of great super-highways from coast-to-coast and from Canada to Mexico is comparable to the railroad building period in the 19th Century," Mr. Wilkinson said. "All signs now indicate that highway construction will continue to expand until it reaches an annual volume of $11 or $12 billions by 1965.

"Each year from now on," he said, "new highways will generate an immense amount of secondary business. This is being brought about by demolitions near the new highways and replacement of a large volume of residential and commercial construction, as well as creation of entirely new business and residential projects."