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Show Lumber Results Good in the Pacific Northwest. Therefore, even though billions bil-lions of board feet of lumber in the national forests are destroyed des-troyed each year by fire, insects, in-sects, disease, windstorms, inefficient in-efficient logging and milling, and recently even by a volcanic volca-nic eruption, this country still possesses one of the largest supplies in the world of standing stand-ing softwood saw timber. Last year the wood products industry suffered through one of its severest downturns since the 1974-75 recession. This was due primarily to the slowdown slow-down in the housing field caused by the soaring interest rates, tight credit, and general weakness of the economv. LUMBER AND wood products pro-ducts are, of course, still the chief building materials used in home construction, accounting account-ing for around 15 percent of the price of a typical home. Almost one-half of the total softwood lumber cut each year is used in home construction. The western lumber industry, indus-try, which provides over half of the nation's wood products, was particularly hard hit, not only by the slump in housing but also by the sharp decline in exports, especially to Japan. HENCE, BY the midpoint of 1980, 47.6 percent of the sawmills saw-mills in the West had either curtailed production or closed down entirely. Because of the slackened demand, the prices of lumber naturally took a tumble, tum-ble, further depressing the industry. in-dustry. Owing to still high interest rates, housing will undoubtedly undoubted-ly remain in a slump for a while longer, which will further hurt the lumber companies. AS THE current year progresses, prog-resses, however, we anticipate - well in excess of two million rfew housing units annually to meet this demand. IN VIEW of the fact that ' construction has been running well below this level, there is currently a substantial housing deficit. Therefore, as building begins to revive in the period ahead, the important forest firms should do well. Five of the country's leading forest product companies are Boise Cascade, Champion International, In-ternational, Georgia-Pacific, Louisiana Pacific, and Weyerhaeuser. Considering the earnings downturn experienced experi-enced by these firms last year, it would be logical to expect that their stocks might well be very depressed. But such is not the case. OVERALL, SHARE prices performed reasonably well and most issues are now about midway between their highs and lows of the past twelve months. Investors have evidently evi-dently been anticipating an improvement im-provement in industry conditions condi-tions and a return to a healthier building environment. The Research Department of Babson's Reports feel that current investor optimism regarding re-garding the top lumber companies com-panies will be justified, especially espe-cially in the latter part of 1981 and into 1982. SO, HOLD positions are being maintained on the stocks of the foremost companies, while Champion International and Georgia-Pacific appear attractive for purchase by those interested in buying into wood products. At a time when there is so much concern over the depletion deple-tion of our natural resources, it is comforting to realize that timber is one natural resource that is definitely renewable. U.S. FORESTS currently cover approximately 740 million mil-lion acres, of which some 488 million acres are classified as "commercial." Trees unlike un-like coal, oil and gas can be harvested and replaced with seedlings which, under proper reforestation methods, can grow to maturity in 30 to 40 years in the South and 60 years |