Lumber Survey Committee Looks to Smaff Home Campaign to Increase Consumption

Washington, Feb. 25.-Calling attention to the fact that new business at the sawmills is considerably below a year ago, although since the middle of J'anuary larger bookings have been reported than in any week since early October, and finding that lumber prices have apparently reached bot_ tom, the Special Lumber Survey Committee in its ZTth quarterly report to the Department of Commerce, released today, looks to the Small Homes building promotion campaign of the National Lumber Manufacturers Association, the National Retail Lumber Dealers Association and other leading groups through the National Small llomes Demonstration as a means of mobilizing home-building activity. Progress in this field the Committee believes should stimulate demand for softwoods, and for hardwoods, especially in interiors, flooring and furniture, The amended National Housing act is expected generally to promote building expansion.

The report states that "the general decline in lumber prices has evidently stopped at a level about the same as 18 months ago. Price variations are still irregular but a fairly stable price current with moderate increases in some species, grades and items is indicated."

The Committee reports that total national lumber stocks at the mills for January 1, 1938, were approximately 8.9 billion feet, an increase of 12.8 per cent over January 1, 1937, and 6.4 per cent over October l, 1937. ,,Although lumber stocks in the aggregate are heavy in the face of current demand and immediate prospect," says the report, ..excess of production over shipments ar,rd new business which characterized most of last year after the first of May, was reversed the middle of December. Since then stocks have been reduced and the relationship of unfilled orders to gross stocks has been slightly upward. Decline in building and general business activity left the industry in the late fall with heavy stocks not only at the mills but in the hands of retailers and other consuming groups. The current effort to reduce stocks and build up order files is bringing the industry to a more balanced market condition. The present determined efforts to reduce heavy surpluses should be continued." Although hesitancy in replenishing lumber stocks in the hands of retailers and industrial consumers is noted, a more optimistic outlook generally is reported than existed in December.

Production in 1937 was about 24,650,000,000 feet, a gain of I per cent as compared with 1936. New orders during the last quarter were 11 per cent below production compared with N per cent below during the third quarter. The year 1937 in building contracted for in 32 states gained 6 per cent over 1936 in residential floor space, 13 per cent in residential valuation and 9 per cent in total construction valuation, as reported by the F. W. Dodge Corporation. Residential floor space in the fourth quarter was 30 per cent below corresponding quarter of. 1936 but represented a higher figure than in any other fourth quarter since 1930.

The increased ocean shipping rates, effective the first of this year, are retarding exports of lumber and plywood to Europe and there is almost a complete cessation of exports to the Orient. Exports of lumber and sawn timber increased 11.3 per cent over 1936; exports of logs dropped € per cent. The combined result lvas a loss of one per cent in exports of lumber, timber and logs. Imports of lumber and timber in 1937 gained one per cent over 1936; log imports gained 60 per cent; the aggregate gain rvas 8.6 per'cent.

The unfilled orders in the furniture industry on January 1, 1938, were low and inventories heavy in the light of the present and prospective demand. Sales at the various furniture markets in January were appreciably below the sales at the January markets in 1936 and 1937. The wooden box industry is expected to show 10 to 15 per cent decline in the first quarter of 1938 as compared with similar period of 1937. This is due to lorver industrial demand for packaging. Substantial increase in lumber purchases by the railroads, it is indicated, is not expected during the next six months.

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