Lumbermen in West see slight upturn
Housing construction should improve moderately in 1982 as mortgage rates dip to 14 percent -- a level one industry spokesman calls the ''buy range for a reasonable market.'' The 14 percent level was anticipated for the latter half of this year.Skip to next paragraph
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Robert G. Anderson, director of market research and economic services for the American Plywood Association, shares the view that ''prohibitively high interest rates'' were the prime cause for lower housing starts in 1980 and '81. He said the predicted lower mortgage rate would boost 1982 starts to 1.28 million from 1 .1 million last year.
Mr. Anderson's forecast of moderately increased home building this year found support from Mac Epley, vice-president of the Western Wood Products Association. He agreed with Anderson's figure, but said he was thankful ''that 60 percent of the market for Western lumber is not tied to new home construction.''
The two executives gave their views of 1982 demand at a meeting here of the Forestry Industry News Roundtable. Mr. Epley told the group that ''a bright spot in the Western Wood Products Association forecast'' is exports. These should rise 11 percent in 1982, he said, to 1.9 billion board feet.
Anderson went on to say he did not expect ''much lower mortgage rates (than 14 percent) during 1983,'' but forecast housing starts next year of 1.55 million.
The plywood association economist noted that today those he calls ''forecaster types'' no longer have their historic indicators as guides. Instead , ''we are forecasting money costs based on apparent supply and demand, rather than on economic trends and relatively constant interest rates.''
Anderson also said that while free-flowing interest rates ''create some problems, they can be dealt with.'' The real problem ''will be to forecast the timing of interest rate changes.''
Epley anticipated a drop in demand for softwood lumber in 1982 to 34.2 billion board feet -- some 6.5 billion board feet under what is viewed as normal - despite his agreement that housing starts should improve some this year.
Of the plywood industry, Anderson said that it had been saved from total collapse in 1981 ''by the strength of several nonhousing markets.'' These markets took 12.1 billion square feet, ''or 70 percent,'' of the nationwide plywood output of 17 billion square feet. This 1981 rise was 12 percent, with chief demand coming from industrial markets, nonresidential building, and the homeowner market (do-it-yourselfers).
Anderson confidently expects Western plywood products to continue to have a permanent role in regional, national, and international markets. He bases this confidence on what he calls ''the complete product line'' of the Western industry.
''While the new producing regions will be specializing in rated sheathing products, the Western mills will continue to produce sidings, sanded overlays, and other specialties,'' he noted.
This broad product line will give Western plywood manufacturers ''a national market for about 60 percent of its capacity,'' he added. The rest will be ''needed in the West'' for local construction.
Structural panel demand in 1982 will be up 6.5 percent from 1981, to 18.2 billion square feet, the economist said.