ProYurds Demund Better Studs.

Consislent Quolity

We understand that prof'cssional builders won't put up rvith inferior stud products. They can't afford tol In order to be productive and profitable. succcssful builders look firr consistent perfbrmance and quality in their building materials. That's rvhy you can count on Rosboro to delivcr a quality stud product.

A Complete Product line

Rosboro nor,v has a stud for every residential application in the species that fits builders' needs. Our product line norv inclr-rdes the fbllorving in all combinations: t 2x1 and 2x6 r Douglas Fir and Hcrn Fir r Green and Dry r Lcngths of 8', 9' & l0 (All Trims) r WWPA grade trademark

Whatever the application. we've got the stucl to do the job.

A Supplier You (on Trusl

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Rosboro Studs

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Where do we go from here?

While I still hear upbeat news from several sources, it is clear that as I call around there is some pretty negative news, particularly at the manufacturing level. Certainly some geographical regions are truly crying the blues.

As you scour the headlines, for every piece of good news, there seems to be a dose of bad following behind. Optimism for the rest of 2007 has been diminishing, and the thought that we would see a quiet first half of year followed by a pick-up during the third quarter has diminished. Indeed, most I am talking to suggest we will not see an uptick until mid-2008.

Till now the general economy seemed strong. The suggestion that the biggest threat to the economy is the housing slump, while accurate, june not be the whole truth. The headlines of builder's difficulties, falling home prices, and sub-prime mortgage failures certainly do not help. My wrrnirirnwhhlrhl*r.cr

ALAN OAKES publisher ajoakes@aol.com

biggest fear up till now has been that consumers who used bucketfuls of money from their homes would stop spending. The side effect of that june already be happening, and that is a slowdown in capital spending across all industries. The broader impact of such a slowdown would extend beyond weakness in housing. It could mean substantial layoffs and cuts in spending power.

Many of my friends outside of our industry suggest that their industries are slowing down. If you look at the pattem of equipment orders over the last six months, it shows a scary picture. According to a recent report, inflation-adjusted expenditures on items such as computers, facilities and new equipment dropped in the last quarter of 2006 for the first time in four years.

That is a strange result when the economy appears to be strong-or is it? There june be an overall consensus brewing that the gravy-train of the last few years across all industries june be coming to an end. Profit margins appear to be falling and that is being reflected in the ratio of negative to positive earnings in the Standard & Poor's 500 stock index in the first quarter. For every one who says they will hit their earnings, more than three say they will not. That is well above the historical average of two. So, the problems are not just our industry!

Other signs are the subdued outlook of senior company executives, investor optimism that recently set a new low, consumer confidence levels, consumer credit card debt, high energy costs, and what is going on in the Middle East. All of the above factors lead to companies making the decision to cut spending because they are not convinced that the economy is on solid ground. That in itself is what june be leading us into a recession.

So my question is where do we go from here? In my own small way, in the companies I managed over 25 years, I never believed in managing for doom and gloom, and will not now. Junebe I have taken some risks that could have gone the other way, but I have always believed that there is business to be had in every type of market in every situation, and have aggressively gone after it.

In this industry I am already seeing some bankruptcies, consolidations, acquisitions, cutbacks in marketing, industry product shifts, new products, and increasing "green" opportunities. All of these can create opportunities for others. Nevertheless, there are only a few companies that will take advantage of these opportunities, because that is the way it works.

In late 2001 and 2O02, we said to many of our industry contacts, you just cannot sit there and do nothing. You have to do something to stay in business. I would ask the same question now. What are you going to do about it?