Lumber's Outlook for 1952

Bv Corvdon \(asner National Lumber Manulacturers Association

In retrospect, lumbermen r,vill recall a year full of uncertainty and uneasiness. Fluctuating and unsettled conditions on the Korean front and inflation scares throughout the vear, added to possible military developments that lie ahezrd, have established a wary, restless feeling toward 1952. Thus, the lumberman's great concern over what turn his business will take next year is rvell-founded. Directly relatecl to the precarious picture have been the decline in d-emzrnd for lumber this year, coupled r.vith loss of manpower to other defense production.

Iiarly in 1951, Robert C. Goodwin, executive director of the Deferrse Manpower Administration, predicted that 6 nrillion people would be employed in defense industries by the year's end and over 8 million by the end of 1952. I{c figured that 50 per cent of the additional labor needed t<r n.ran clefense plants tvould have to come from those working for producers of civilian goods. Generally, the lumber irr<lustry has not felt a drain of manporver, but tolvard the: lltter part of this year there have been reports from tlrc Ncn' England and Lake States on manpo\ver lost to other defense plants with higher \\rage scales and uncontrolled prices of defense items.

A survey is no'rv being conducted by the Department of '| ,:rbor in order to provi<le manpower authorities with d:rta on skills and exoerience that rvill be needed by cleferrsc intlustries. These rvill require the bulk of manpo'iver recnritlnent, so the lumber inclustry should be prepared frlr nro:'e acute labor shortages r,vhich r,vill come out of th:' ernphasis on mass production of military goods and corrlinued attempts of the armed services to realize origirral plalrs for at least a 3 million-man n-rilitary force by n-ri<l1952.

I-umber is one of our mtist important 'ivartime rnateriiLls lrrrd lvill be pressed into service in the expansion of defer.rse' :rctivities. Hovy ironic, then, that at such a tine, lurrlrcrrrren have experienced a clecline in demand and a softenirrg lurnber market !

As you kno'iv, the decline in lumber den-rand has coutinue<l steadilv since the first felv months of 1951, right up to thc tinre of this u'riting (November, 1951). Yet lun.rber Prodrrction has contirrned at the pace chalked up in 19.50---the record year of the postwar period-rvhen thc totlrl ;rnrounted to about 33 billion board feet. This vear's rrro' duction rate exceeded shipments and orders; as a result, rnill stocks continued on the increase during the year whilc luml;ermen worked off their unfilled order files. There was a hesitancy on the part of retail lumber yards to accuinuliLte any more lurnber than just enough to take care of crlrrent needs. Thus, retail yard stocks declined since ru id-1951.

The decline in demand shorvs up clearly when vou rernenrl->er that imports of lumber in 1950 exceeded exports by over trvo billion feet, and stop to think that the end of 1951 n'ill reveal a net of imports over exports far less than that amount. Thr: lumber industry is delicately balanccd on the larv of supply and demand. Because of this fact, crlntinuation of the demand decline can onlv result in dccreased lumber production.

By the end of this year, total new non-farm dwelling units will be far above the 850,000 predicted by the Housing and Home Finance Agency. As a'matter of fact, 850,000 houses'w'ere started in the first nine months of 1951 so that, provided an average of about 50,000 houses has been maintained since then. there will be a total of over one million housing starts for the year. The 1950 all-time record figure of 1,400,000 starts had only. one close contender, that of 1949, u'l-ren the total reached 1,025,000.

It is estimated that the rate of nerv starts for the third cluarter of this year was running 35 per cent behind tha: of 1950. This means that 850,000 starts will be recorded for 1952 providecl this reduced rate continues into next year; right norv, it is too early to predict rvhat effect the relrtxation of housing credit controls will have on the lumber marlcet. Basic construction order M-4A seve:ely restricts the use of critical metals in construction. Yet most housing is unaffected by this order since less than the prescribed amounts of these metals are generally required.

The Second Supplemental Appropriation Bill for 1952, p:Lssed ir-r October, providees $3.7 billion for military con. struction. Direct and indirect military requirements have not vet taken up the slack in demand created by the restrictions on housing credit, nor have they absorbed the co:'responrling high output of lumber. The picture may change considerably as soon as the large military colrstmction Drogram gets fully under way, provided the -mili-

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(Continued from Page 60) tary uses lumber in accordance n'ith defense agencies' recommendations lvhich call for lurnber to be used in placc .of presently specified other materials.

Lumber manufacturers \r'ere greatlv inconvenienccd throughout 1950 rvhen a shortage of freight cars crcated a serious problem. This year, freight car manufacturers u'ere aided by steel allocations allorvinq them to get their output up to almost 10,000 new cars a month. Diffrculties in obtaining component parts and strikes in a fen' large plants kept manufacturers from approaching this goal in most of the months during the year. Although some seasonal difficulties were experienced in obtaining freight cars, no serious disabling freight bottlenecks occurred during 195i after settlement of the srvitchmen's strike in January. Other thar-r the possibility of shortages suddenly flaring up in th,: lMest, the freight car situation looks better lor 7952.

During 1951, defense plant construction n'as expanderl rapidly and several atomic energ)/ projects constructed. In fact, private plant construction in manufacturing induslries ran at a. rate doultle that of a year ago. This resulted ln a dollar value of all construction for the year rvhich r,r'as a substantial increase or-er 1950. Continuing at the presclrt tate, construction n.ill require excessive quantities of controlled materials in the year ahead. To meet this demand, lumber rvill have to lte substituted for steel. copper and aluminum wherever possible. During World \\rar II, a. latge amount of steel u,as sar-ed by the use of connectorsupported lumltenl'here plans called for structural stecl. This technique was used to advantage in both civilian and military construction as the connectors added the strength of steel to the durability and versatility of lumber. Shoul<l the drain on structural steel continue into next vear. the 'system rrill again see rvider use.

The all-out national defense program is expected to reach its peak in 1952-53 and lumber should be called upon morc .and nrore to take its place in the ranks. With gross mill stocks at about the sane ler,el maintained cluring the early years of World \\rar II, \\.e are confident that the lumltermen can meet anv foreseeable lumber demands for the defense effort and still furnish enough lumber to meet the lequirements for civilian needs.

We can only take an educated guess at lumber's outlooli for 7952. This is equally true of many other industries on the borderline of the new year, for the developments to corne can but be dependent upon the outcome of varions hectic disturbances now boiling in the rvorld's cauldron.

305th Terrible Twenty Golf Tourncment

The 305th Terrible Twenty golf tournament was held at Pebble Beach on Thursday, October 18 and Friday, October i9. Pebble Beach course rvas played on Thursday and Cypress Point course on Friday morning. Harold Flamilton turned in a net score of 70 and.lvas au'arded thc first prize. Art Harff, rvith a 72 net score won second prize.

18 members, many rvith their rl'ives, daughters and guests, nrade the trip North and made their headquarters at Pine Inn, Carmel. Several r.ent to Berkeley on Saturday, October 20, u'here they took in the Southern Califorrria-California fr,otball game.

Annual Christmas Party of San Francisco Lumbermen's Club To Be Held in Palace Hotel, Dec. 20

The alnnal Christmas Party of the San Francisco Lumbermen's Club u'ill be held in the Comstock Room. Palace Hotel, San Francisco on Thursday, December 20, at noon.

The Club t,ill entertain a group of 50 needy children at luncheon, and till provide entertainment in the form of a- puppet sho'n' ancl a magician. The children u'ill range in age from six to 10 years. Christmas presents rvill be provided for each child.

Leonard Kupps n'ill be chairmar-r of committees in charge of arrangements for the big event. Hank Needham r,vill act as Santa Claus

All lumbermen and their ladies are invited to be rrresent.

October Housing Starts- 86,000 Units

Homebuilders started 86,000 new permanent nonfarm drvelling units in October, a decline of 5,000 units, or 5 per cent, from September, according to preliminary estimates of the U. S. L,abor Department's Bureau of Labor Statistics. Early reports indicate that the October downturn was u'idespread, but u'as most pronounced in the Southern and Pacific States.

During ihe first 10 months of 1951, a total ol 942,500 nerv dn'elling '.rnits were begun , 22 per cent less than thc record 1.215.100 started during the same period last year. Includecl in the January-October 1951 total are 20,400 nerv dn'elling units in projects started bv private builders for' personnel at rnilitarv anC naval ir-rstallations, under pror-isions of the National Housing Act of 19,19. Almost 32,500 neu, units have been started under this program sincc it got under \\'ay in November 19.19.

Final reports for Jul1' boosted the total for that month to 90,5@ nnits, a gain of 4,500 over the Bureau's preliminarv estimate. One-family home construction rvas dorl't't 23 per cent tl.ris 1'earn'hen the first 7 months of 1950 and 1951 are compared. However, the decline in rental-type housing \\'as small (rl per cent) because of the large number of units in multifamilv structures started bv public housir.rg authorities

Telegraphic reports of local building permits issued drrring October for nerv residential construction in urban places indicate substantial declines from September in Atlanta. Indianapolis, and Miami Beach. Marked gains occurred ir.r Beltimore. Chicago. Denver, and Kansas Citl', Mo.

Held Open House

The United States Plyrvood Corporation held an open house at its neu, offices and warehouse at 4.180 Pacific Blvd., Los Angeles, on November 9, from 4:00 p.m. to 8:00 p.m. Aborrt 1200 visitors inspected the beautiful neu. of6ces, 60,000-squarefoot rvarehonse, and clisplavs of the con.rpany's products. Refreshments were served.