"1962-1963

By THOMAS T. SNEDDON, Executive Vice-President Notionol Lumber ond Building Moteriol Deolers Associotion

Judging from all information available, 1962 has been a reasonably good year for lumber and building material dealers, and 1963 should be slightly better.

Why then are there rumblings of disappointment?

There are two basic reasons. I think. The first is quite real. There still exists a tight squeeze on profits-particularly in terms of return on investment, The second reason is more emotional; we were oversold on the "Soaring Sixties," so the lag of 196l and the moderate recovery of 1962 have left most dealers rather less than enthusiastic.

Garnered from United States Govern. ment reports, plus some other reliable sources, here's a brief picture of the light oonstruction indurtry in 1962. Retail 6ales by lumber and building materials dealers during the first nine months were up about five percent over the similar period of a year ago, However, this increase was enjoyed by only one-half of the dealers. (According to a survey by our own association, 52 percent said volume was up, 3l percent said it was down, and 17 percent said it was about the same. )

The number of housing starts, which is often used as a rough indicator of industry healthn is presently forecast as I,400,00Gabout five percent above 1961. As more and more dealers place greater emphasis on complete package remodeling sales, however, I feel that the housing start figureswhen used as an o'indicator"-will have to

Secretory Freemon Announces Timber Approisol Review Committee

Secretary of Agriculture Orville L. Freeman has announced establishment of a three-man Timber Appraisal Review Committee to consider methods and procedures used in appraising timber for National Forest sales.

Members of the Committee" which was established by the Forest Service with Secretary Freeman's approval, are: be interpolated with this market. Comparing this year with 1961, expenditures for materials and outside labor for repair and modernization were also up about five percent. (And again looking to the NRLDA study, 95 percent of the dealers said activity in this area was good or fair, while only five percent reported it as poor.)

A. C. Worrell. Professor of Forest Economics, School of Forestry, Yale University, New Haven, Conn.

A. N. Lockwood, past-President, American Institute of Real Estate Appraisers, Newton, N.J.

Looking back is relatively easy; looking ahead can'be tough-and dangerous--but that is what most businessmen want to know.

Late in November, the Administration issued its long expected and much discussed "anti-discriminationo' order on all housing insured by or receiving financial assistance from the Federal government. ?he order was not as broad as some ex. pected and its greatest impact will be on builders relying on FHA insured loans. FHA insures some 20 to 25 percent of all new housing, and that is a fair sized chunk. Many builders predicted the order would be disasterous, and, while I am not really alarmed to this extent. I do feel for the time being it will have an adverse effect in some areas, particularly urban sections of the country.

That is really impossible to predict is the amount of o'slack" in FHA business that can----or will-be taken up by the conventional lenders. Perhaps most of it will be, with the result that FHA, not the industry, will be the big loser. Of course, there is always the possibility that the o'anti-bias" order will be extended to mortgage banks and savings and loan associations. If this happens, whatever effect the current order has on housing will be greatly aggravated.

M. J. Lauridsen, Valuation Engineer, Internal Revenue Servioe, Portland, Ore.

The Committee has been established in accordance with Secretary Freeman's recent statement to the timber industry that the Forest Service will continue to review stumpage policies to eliminate non-produc. tive controversies with timber purchasers and in every legal and practical way to improve procedures.

"To assist in the review." the Secretarv told the Western Pine Association in his Sept. 14 address at Portland, Ore.o 'oI am asking the Forest Service to set up an Advisory Committee of people who are knowledgeable about these valuation problems and who have no obligation to the Forest Service or to industry."

Of more importance to the economy than "social reform" is tax reform, but right now the Administration seems more intent on a quick tax cut than reform. Object: pump more money into consumers' hands and give business a shot in the arm. Mr. Kennedy's pledge o'to get the country moving" is behind schedule. Most business economists are wary of tax cuts without tying them to reform, but White House economists disagree. Congress will make the decision. How early in the year it acts will determine the effect on business in general and housing in particular.

Vhat it seems to all boil down to is this: New housing starts: about the same as 1962-perhaps slightly lower in the first half.

Home and property improvement: continued rise. Up another two to four percent over the record highs set in 1962.

Farm building: up slightly, dealers themselves are more optimistic.

Commercial and industrial: As of two months ago, dealers were not enthusiastic about 1963 prospects, but the professional economists see a three to four percent gain, All in all, the light construction industry should have a reasonably active year, particularly in the last half.

NHLA District Luncheons

The National Hardwood Lumber Association in Chicago has announced the return of M. B. Pendleton, Secretary-Manager, and W. C. Barrier, Chief Inspector, from a ten.day trip to the West Coast.

During the trip the NHLA officials held four luncheon-meetings, one each in Portland, Seattle, San Francisco and Los Angeles, and visited numerous yards and hardwood production facilities.

The meetings gave the opportunity to discuss association business and to advise the members that the Board of Managers had authorized the holding of the 1968 NHLA convention in San Francisco. This will be the first time the association has held its annual m,eetins on the West Coast.

ALS Subcommitlee to Meet in Chicogo in Jonuory

The first formal meeting of the Subcom' mittee on Revision of American Lumber Standards will be held at the Drake Hotel in Chicago, illinois, on January 24 and.25, 1963. This Subcommittee was established by the full American Lumber Standards Committee at its annual meeting in Wash' ington, D.C. in November.

Its general function is to develop a general revision of Simplified Practice Recommendation (R-16-53) for presentation to the full Committee in May. Its most important specific function is to arrive at a revision that will carry out the principle established by the Committee in November that American Lumber Standard sizes shall be related to moisture content. The mechanics of establishing specific sizes related to specific moisture content or contents will be of primary concern.

The meeting on the first day will be open to anyone who wishes to attend. This meeting will permit anyone who is interested in doing so to present to the Subcommittee proposals for a solution to carry out the principle previously mentioned. It is to be understood that such proposals must be within the limits established by the proposal