What's going to happen in 2009? The predictions are mostly gloomy.

The economic slowdown is likely to last much of 2009, although we've read of a recovery beginning possibly mid-year. (There's too much attention in the media on the technical definition of a recession.)

And even if we emerge from several quarters of GDP contraction, the unemployment rate is likely to continue growing for a while.

 

U.S. existing home sales fell 3.1 percent in October compared to the previous month, according to figures from the  National Assn. of Realtors . This came after an increase in sales of existing homes in September.

 

Here's something if you want some long-term optimism. The  U.S. Census bureau  expects the total U.S. population to grow to 363 million by 2030.

The census reported a population of 281 million in 2000, and the 2010 population is projected to be 308 million. These are strong long-term indicators for housing, cabinets and furniture.

 

Most major cabinet manufacturers are reporting good-sized sales declines in 2008, and residential furniture continues to struggle, especially with more retailer bankruptcies.

In the early stage of research for our FDM 300, we have received reports from a number of companies that have increased sales in 2008 by at least a small amount, including producers of millwork, store fixtures, institutional furniture and even cabinets.

 

In its recent newsletter, Timber Products Co. advises businesses to weather the current economic crisis by searching for new customers, considering exporting, looking for new marketing channels and considering new markets. An example of the latter is kitchen cabinet manufacturers that are producing storage products for the garage.

 

The Russian log export tax was expected to increase from 25 percent to 80 percent in January 2009, according to Wood Markets, but this tax has been delayed. This could have a major impact on China's wood products industry, since China consumes half of Russia's total wood exports.

 

There is some new production capacity being built. In addition to the well-known Ikea factory in Virginia, we visited a large-scale expansion in Indiana ( Indiana Dimension ) and a new large-capacity cabinet company ( MasterCraft ) in Texas. Detailed reports of what both of these companies are doing are in this issue and online.

There are other expansion projects that are temporarily on hold due to the tight credit situation, but we may not have to wait too long to see many of these move forward.

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