Arrcn LACo. The ^ @fl-NAr

(Continued from Page 14) of such action be widely promulgated throughout the industry.

FURTHER RESOLVED, that the President and Secretary be, and they are hereby, authorized and directed, on behalf of the Lumber Merchants Association of Northern California to prepare, or cause to be prepared, and presented a copy of this Resolution to the following grading agencies:

A. M. Hickox Insoection Service

R. W. Hunt Inspection Agency

West Coast Bureau of Lumber Grades and Insoection

West Coast Lumber Association

California Redwood Association

Pacific Lumber Inspection Bureau

Western Pine Association and to such other Agencies as they may deem appropriate.

(signed) JACK F. POMEROY Secretary ATTEST:

Frank E. Heard President

Economic Perspective

(Prepared by the Lumber Merchants Association from data submitted by its members)

Nothwithstanding the fact that industry sales increased approximately 9/o in 1958 over the low of 1957, profits are estimated to have increased only about a third of that figure for an average of. 3.25/o of net sales before taxes-indicating a continuation of intense competition within the industry. The turning point in 1958 came in March when FHA Home Mortgage applications for Northern California increased a dramatic 126/o over March 1957. The increase continued well throughout the year although total residential construction is estimated to have increased only some 147o.

Prevailing business conditions were reported by member dealers for the 12 months of 1958 (as compared with the 12 months of 1957) as follows:

VOLUM,E-9.3/o Average Increase: 73/o report increase oI 14.3%, 12/o report no change, l5/o report decrease of 8.3%.

INVENTORY-4.6% Average Increase: 54/o report increase of 14.3%, 15% report no change, 3l/a report decrease of 10.1/o.

PROFITS-3.3/o Average Increase: 60/o report increase of 10J%, 16/o report no change, 24/o report decrease of 11.6/o.

Average Age of Accounts Receivable:

1957:

First Quarter ...........48

Second Querter .....51

Third Quarter ..... .....50

FourthQuarter. .........52

Looking Ahead

1958:

53 days

52 days

48 days

53 days

The four major ingredients of a recovery cycle-inven- tory changes, home building, consumer spending for nondurable goods and services, and g'overnment purchases-are expected to provide the base for further expansion forces throughout 1959, although the rate will undoubtedly be somewhat slower in the latter half of the year as these demands are more closely satisfied. We in the materials industry are more closely concerned with construction, and certainly it is _a period of optimism. The home-building industry entered the year with a high level of commitmEnts, construction contracts and homes already underwav. A realistic estimate for the California market is approximitely 2l2,0OO new nonfarm dwelling units this yeai,- which wiil represent an increase of approximately l0/o.

Dealers Expect Strong'59 Market

Most reporting dealers felt the total construction market in 1959 will remain strong. llowever, l6/a believed new construction in their areas would be down, and 38Vo believed farm construction would be off. Regarding home im- l)r'()\'clne1rts, tlrC rr1)t.rrting rle:ricrs \\ er(' abOttt t'r t'tt1,r tlir irlcrl, n'itlr .i.5t,, lr,ol<ing ft-,ru'arrl to :ttt itrcreitst. :itt11 J.it,i crlrt'cting t():('('ltss of this tr:rr1c. ]rt the cottttttt'rcialirrrlrrstrial llel<1. 7()', btlieve tl it n'ottltl t'ither ittcrt'asc or rrrn:rin aborrt tht' s:rrne in '59.

In this connection, it is interesting to note that a conservative estimate indicates the dollar volume of home improvements increased some 39lo in the 1954-57 period, while residential construction declined 3/o in dollar valuation and all building construction increased only 2lo/o.

'l'o tttake this rcvicl-ls lrt'lofttl as trossilllt'to its clc:Llt'rs irr tlrcir pl:Lrrrring. tlrt f,,ll,,rviirg strr,lr \\';IS l)rt1):trecl frottt irrforrrr:rtion srrbtrittcrl b,r- thc Lll:\ rlircctors:

Questions and Answers

1. S-\l.l:S-a.'. c,rnrpart:rl *itlr'58, n'ill s:Llcs,'i,r,,rrr c,,nIl,a1r,\'Irr '5c) ittcrrasc, r-crrr:Lin abriut tlrt' s:urrr, or clecrc:rrt l'

Remain same - 16%; Increase , 84ok.

-2. IN\ l'-N'l'OR\ H:LrL'-r()11 :Il)(,Llt rt':rcll.trl tlli'lttittitltttttr itlvttttr)r-\ t() :trlt'tlrllrtel-r strt it't' r,,111' ('\l)t'ctt(f i(l ::rlL: t:rtt l No- 25ok; Yes 75o/o.

.1. I'li()l'l'l'S l)() -\()Lr ('\l)('.1 l)r()nt5 per,l,,)l:Lt'oI s:L]t's i1f it.) t'r incrt:t.t. rt'tll:iitt itl)()ut tllt ::Illll. ()r dtcreasci'

Increase .,44o/o; About the same : 44/6; Decrease -'IZok

J. I'Ii l(-l'.S (',)llsi(lcre(l :rs it gr()l1l). rlo vott allticilr:Ltt' rc::tlt lrrtct' ,ri r.oLrr rtrt,rt.lrarrrlist, linCs uill inctt':t:t', retnaill ltlrortt tltr'S:1ll1e, (,1rlecrcase ?

Increase -- 8oo/o; About same -20%.

.5. OPI'lR'\'l'lN(; ('()STS-.\q 11 l)cr'c('Iit:rge oi trt't s:Llt', tlo l-ott :rnticiltatC r)l)et.:rti1g, c,rsts g'ill ilcrr':r.c, rtttrain:rltlttt tllc S:llll.t', ()r rlt'crczrse ?

Increase:6ook; About same -25o/oi Decrease - l5%. (r. l-\Iftl-O\'\ll'-\'l'-\\'ill ctrtIltt,r'tttcrtt itt lottr collrlr'!rr-\'ittct'e:tsc, rt'rrrairt alrottt s:Iltt(' t)r dccrease?

Increase : 30/o; About same : 66/oi Decrease:4o/o, (\\'lrilc the ovcirvhe lnring pcrcentagc ,'i rlealcr',. $ ill tr,v lo ltolrl tlrt, lilc {rrr Crrtlllovrrrullt, .rvcn thouglt irtcrt:isitrg s:rleS voltttllt, tltost: