FUTURE DEMAND FOR TIMBER 



417 



of cement consumption is cither noncompetitive or 

 complementary in relation to lumber, a composite 

 price in which Portland cement is weighted by 

 total consumption would be biased. 



Numerous other examples could readily be cited. 

 Hence measurements of relative price on the basis 

 of data now available may be roughly indicative, 

 but this is about all that can be claimed for them. 

 The relative price of lumber bears a strong re- 

 semblance to lumber's real price (table 243). 



In general, price of lumber and price of all com- 

 modities maintained a fairly constant relationship 

 from 1926 through 1933. From 1934 through 1950 



Table 243. — Price oj lumber in relation to price o-f 

 certain materials in ])rice competition with lumber, 

 1925-54 



[1926=100] 









Relative price of 







Annual 



lumber 





Annual 

 average 



average 

 price of 













Year 



price of 



certain 





Index 





lumber 



competing 





smoothed 





index 



material ' 



Index 2 



by 3-year 

 moving 

 average 



1925 



100.6 

 100.0 



100. 8 

 100. 



99.8 

 100.0 





1926 



98.7 



1927 



93. 1 



96.7 



96.3 



96. 7 



1928 



90. 5 



96. 6 



93. 7 



93.4 



1929 



93.8 



103.9 



90.3 



89. 8 



1930 



85.8 



100. 5 



85. 4 



82.3 



1931 



69. 5 



97. 6 



71.2 



73. 6 



1932 



58.5 



91. 1 



64. 2 



75.0 



1933 



70. 7 



78.8 



89.7 



84. 



1934 



84. 5 



86.2 



98.0 



93.0 



1935 



81. 8 



89. 6 



91.3 



95. 9 



1936 



87.0 



88.5 



98.3 



98.5 



1937 



99. 7 



94. 1 



106. 



99. 6 



1938 



87. 4 



92.5 



94. 5 



101.0 



1939 



93.2 



90. 9 



102. 5 



104.2 



1940 



102. 9 



89. 1 



115.5 



117. 7 



1941 



122. 5 



90. 6 



135. 2 



131.4 



1942 



132. 8 



92. 6 



143.4 



142. 7 



1943 



141. 4 



94. 5 



149. 6 



152. 4 



1944 



153. 3 



93. 4 



164. 1 



157. 3 



1945 



155. 1 



98.0 



158. 3 



164. 



1946 



178. 4 



105. 1 



169.7 



189. 1 



1947 



277. 6 



116. 



239.3 



217. 9 



1948 



313. 



127. 9 



244. 7 



233.6 



1949 



286. 



132. 



216. 7 



233. 5 



1950 



327.4 



137.0 



239. 



231.9 



1951 



351. 4 



146. 4 



240. 



238. 2 



1952 



344. 4 



146. 1 



235. 7 



233.4 



1953 



341. 



151. 9 



224. 5 



224. 6 



1954 



335. 2 



157. 



213.5 





' Includes Portland cement, concrete block, common 

 building brick, light-colored facing brick, hollow building 

 tile, structural steel, reinforcing steel bars, building sand, 

 building gravel, crushed stone, insulating board, and 

 Douglas-fir plywood. From 1947 on it includes steel 

 window sash, rubber and asphalt tile, and asbestos-shingle 

 siding. 



2 Obtained by dividing the lumber price index by the 

 corresponding competing-materials price index. 



price of lumber rose much more rapidly than price 

 of all commodities, but from 1950 through 1954 

 they have maintained about the same relationship. 



The relation of lumber price to price of mate- 

 rials in direct competition with lumber appears to 

 have been less stable. During the period 1926 

 through 1931, price of competing materials de- 

 clined less than lumber price. Marketwise, lum- 

 ber appears to have had a substantial price ad- 

 vantage by 1931, but the advantage waned quite 

 rapidly and had disappeared entirely by 1937. 

 From then until 1948 lumber price increased 

 much faster than price of competing materials. 

 But that progressive development of more and 

 more disparity came to a halt in 1949. From 

 then until 1954 the price disadvantage of lumber, 

 marketwise, tended to lessen. Relative price of 

 lumber and real price of lumber have been tending 

 to converge as they had done in the early 1940's. 



Real price is a better measure than relative 

 price for three reasons, (a) Measurements of 

 real price are the more reliable, (b) Real-price 

 data are available for a longer period of time. 

 (c) Since the rough data available indicate that 

 relative price and real price have had a fairly 

 strong resemblance during the period 1925-54, 

 substitution of the one for the other would ap- 

 parently not invalidate comparisons of long-term 

 real-price trends against long-term, consumption 

 trends. 



Relative Consumption Decreased 

 66 Percent, 1900-1954 



During the period 1900 through 1952, popula- 

 tion of the United States more than doubled and 

 national economic output increased fourfold. 

 Per capita consumption of goods and services 

 in general has increased in accordance with rising 

 standards of living, and this has involved a sub- 

 stantial increase in per capita consumption of 

 basic raw materials. The relevant measure of 

 lumber consumption is therefore not simply per 

 capita lumber consumption but rather per capita 

 lumber consumption in relation to per capita 

 consumption of the cluster of materials which 

 includes lumber and all materials that have been, 

 or economically could have been, substituted 

 for lumber."*^ Data on the trend in per capita 



136 Hypothetically, the volume of lumber consumed 

 annually could have remained constant through this 

 whole period with price continually rising. Per capita 

 consumption of lumber, under such conditions, would 

 have been declining. Less and less lumber would have 

 been used per unit of economic output. Continuous 

 decline in per capita lumber consumption is entirely 

 consistent with concurrent rise in price of lumber. But 

 the simple decline in per capita consumption of lumber 

 does not indicate the full extent to which lumber has been 

 displaced by substitute materials — nor does it indicate 

 the full impact of price and nonprice factors on quantity 

 of lumber consumed. 



