Construction Industry

H.V.

President

Douglas fir lumber producers have had another big production year which may equal the record output of 1951. This lumber demand has been tied in closely with the high volurne of activity in the light construction field.

It is'axiomatic that we have always had a healthy industry when the light construction business was rolling along in high gear. By the same token, bad times always follow any severe drop in construction.

Again during 1952 we have witnessed the construction of close to 1,200,000 new homes. We have seen new schools built by the hundreds. Industrial expansion has maintained a high level. Commercial building has kept pace with new home construction as new subdivisions have been built. Remodeling of existing homes, modernization of older homes and business structures has reached a substantial volume.

All this activity has meant high demand for Douglas fir lumber, the nation's premier construction material. It has kept large and small mills at near peak production throughout the year.

For the first time in several years, this region suffered no severe freight car shortage of long duration, so we were able to filI our commitments pretty well on schedule. We have had a very favorable summer and fall from a weather standpoint. Logs have been plentiful, even though we had a shut dolvn late in the fall because of critically dry forests.

It looks now as though we will produce something like 10,200,000,000 board feet of lumber in 1952. This will be one of our biggest years.

We have made excellent progress this year in improvement of our physical plants and modernization of older mills'to make them more efficient and to enable us to produce better lumber to cur customers requirements. During this year we have maintained our impressive progress in better forest management, adding many thousands of acres to certified tree farms.

What will happen in 1953? That is a question uppermost in the minds of lumber manufacturers, wholesalers, retaiiers, builders and home purchasers.

We are conservatively optimistic about the year just ahead. We believe the same general conditions which influenced the lumber business this year still apply. We see no let-up in the demand for new houses. We should again top 1,000,000 new homes in 1953. That means commercial construction will maintain a high plane of activity, for new communities, and new subdivisions require new service industries and new service structures.

It will take several years to catch up with the demand for new schools, for the war baby crop is just coming of school age. Industrial plant expansion should be substantial.

The farm market promises a fertile field for lumber use, for farmers are prosperous, and there isa continuing need for improvement, maintenance and new construction to keep the farm plant competitive.

Political considerations have very strongly influenced our national economy since World War II, a fact evident to all of us. Controls have been used freely since the outbreak of the Korean War to retard housing. When housing lagged, controls were relaxed. It is apparent that Congress has recognized the importance of a prosperous light construction industry if national prosperity is to be maintained; in the last session Congress instructed the Federal Reserve Bank to relax credit restrictions whenever new housing starts fall below an annual rate of 1,200,000 in any quarter.

There is no evidence that we can expect an economy free of controls for the foreseeable future, even with a change in administration in Washington. Look for a vitamih pill for the light construction business when it falters. It follows if the light construction industry can be maintained ata high level of volume, the lumber industry u'ill keep healthy.

We think the facts point to a continuing need for more new homes in the nation. This is a growing, expanding nation, with population on the up curve. One official of the National Association of Home Builders says we will be building 2,000,000 new homes a year by 1970. Certainly our population growth figures indicate a need for housing of all kinds.

We believe forecasts from some experts that housing starts will fall below 1,000,000 in 1953 are too pessimistic. These experts have continually underestimated housing starts during the past half a dozen years. There is no evidence that they are any more accurate this time.

Probably one of the most encouraging and reassuring de- velopments in our region has been the determined efforts of many of our landowners to put their forest house in order for the long pull. Trees are a crop up here. Timber owners have spent millions of dollars this year in a continuing prograrn of better forest practices. This money has been spent in additional miles of logging and fire network. It has been spent in new forest lookouts, in new tank trucks and fire equipment, in new water holes and storage tanks, in other fire tools. Other money has been spent in thinning experiments in young, thick, fast growing second growth stands.

Because the markets have been good forall sorts of logs, there has l-.een a substantial increase in re-logging on many thousands of acres of freshly harvested forest land. Some firms have sent re-logging crews over the land as many as four times. On each trip these small crews with light equipment pick up additional values. Short logs, broken and marginal logs and small logs are salvaged in these re-logging ventures. Result is that at least an additional twenty-five per cent more volume is being brought in from every acre of forest land than was possible a few years ago.

This is an important conservation move. It means more payrolls and more logs from every acre. It means leaving our logged land in much better condition to reforest quickly. It means, also, taking out much of the heavy fuel which could feed forest and slash fires and do damage to values in the land.

Another great forward step up here has been the revolution in raw material supply for the region's kraft paper mills. At least half of the wood supply used by these .mills comes from leftovers at sawmills and plywood plants. Chippers have been

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