DEMAND FOR TIMBER PRODUCTS 



145 



Gross national product 1920 - 70, 

 with projections to 2000 



1920 1930 1940 1950 1960 1970 1980 1990 2000 



Figure 51 



jected changes in the gross national product 

 have been used as a principal indicator of changes 

 in demand. 



Between 1920 and 1970, the gross national prod- 

 uct, measured in constant 1967 dollars, increased 

 more than five times — rising at an average annual 

 rate of 3.4 percent (table 114, fig. 51; Append. 

 V, table 1). Annual changes have fluctuated 

 widely, from as much as +16.1 percent to —14.8 

 percent (fig. 52). The highest sustained rates of 

 growth in gross national product occurred in the 

 1960's, when growth averaged 4.5 percent per 

 year. 



The wide fluctuations in annual rates of growth 

 in the gross national product have reflected such 

 factors as differences in the rates of change in 

 labor force, rates of unemployment, hours worked 

 per year, and productivity. Cyclical factors 

 will presumably continue to cause fluctuations 

 in gross national product in the years ahead. 

 But for this study only trends in growth were 

 considered, using three different rates of growth: 

 3.5 percent, 4.0 percent, and 4.5 percent. 



Annual percentage change in 

 gross national product 1920 - 70 



h 



li -lUli llllli ■ li.i i- i-iiiii-i 



I ppr-j 



Basis for gross national product projections. — 

 These differences in assumed growth rates for 

 gross national product partly reflect the different 

 assumptions on population growth and the related 

 size of the labor force. Thus, the highest rate of 

 growth in gross national product is associated 

 with the high projection of population. However, 

 most of the difference in projected rates is due to 

 underlying assumptions on trends in productivity 

 of the labor force. 



Given a continuation of recent trends in labor 

 force participation rates and hours worked per 

 year, and an unemployment rate of 4 percent, 

 the implied rates of increase in productivity in the 

 private economy underlying the gross national 

 product projections are about 3.0 percent, 3.4 

 percent, and 3.8 percent respectively. In the 

 1960's productivity in the private economy 

 increased about 3.6 percent per year. 



The medium assumed rate of growth would re- 

 sult in a gross national product of $1,310 billion 

 in 1980 — some 54 percent above that of 1970 

 (table 114). By 2000 this projection would reach 

 $2,860 billion— some 3.4 times that of 1970. The 

 associated projection of per capita gross national 

 product in 2000 rises to $10,180 — nearly 2.5 times 

 the 1970 average. 



The projections of gross national product used 

 in this study are substantially higher than those 

 used in earlier appraisals of the timber situation 

 by the Forest Service. For example, the medium 

 projection of gross national product in 1980 is 

 about 15 percent above that used in the preceding 

 timber appraisal published in 1965. 6 However, it 

 is close to recent projections made by the Bureau 

 of Labor Statistics, 7 the National Planning Associ- 

 ation, 8 and the National Industrial Conference 

 Board. 9 



Disposable personal income. — This measure of 

 income available for spending or saving by the 

 Nation's population is another important indi- 

 cator of the demand for certain products such as 

 furniture and various grades of paper and board. 

 It also has a significant influence on household 

 formation and size of dwellings. 



Since 1950, disposable personal income has 

 equaled about 68 percent of the gross national 

 product. This historical and rather constant 

 relationship was assumed to continue through 

 the projection period (table 114). 



1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 



Figure 52 



6 Op. cit. Timber trends in the United States. 



7 U.S. Department of Labor, Bureau of Labor Statistics. 

 Patterns of U.S. economic growth. Bull. 1672. 1970. 



8 National Planning Association. The technique of 

 long-range economic projections. Projection Highlights, 

 Vol. 1, No. 5. Washington, D.C. 1970. 



The U.S. economy in the coming decade. Pro- 

 jection Highlights, Vol. 2, No. 10. Washington, D.C. 1972. 



National Industrial Conference Board. Economic 

 growth in the seventies. Washington, D.C. 1970. 



