Monday, February 9, 2009

Housing Slump

Weyerhaeuser predicts a grave first quarter
Additional 300 jobs are cut as housing market continues to dwindle

Written By: Christopher Hinton, Marketwatch
Posted by: Liwin Troy Lee

NEW YORK (MarketWatch) -- One of the largest lumber-producing companies in North America provided a dire outlook Friday that included more deterioration in the housing market and turmoil in the credit market.

Weyerhaeuser Co. said home-building activity is at its lowest level since 1959, with new-housing starts in 2008 at 620,000, down 37% from about 1 million in 2007.

"Not only have we seen a 77% drop in housing starts since 2005's peak level of 1.7 million, but the pace of this decline has accelerated," Chief Executive Dan Fulton said on a conference call with analysts, following the release of the company's fourth-quarter results.

In response to the housing slump, the company shut down veneer and lumber mills in Alabama, letting go about 300 employees as it cuts capacity and reduces cost. Just last month, Federal Way, Wash.-based Weyerhaeuser said it would close two mills in Washington, resulting in a reduction of 221 employees.

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