Increased housing starts brighten Northwest employment picture

Sawmills are humming once again in the West, and they're producing optimism as well as lumber. Analysts in California, Idaho, Oregon, and Washington - the top timber industry states in the area - say renewed mill activity hasn't produced any sudden upward surges in their economies. But in at least three of the states, it is expected that last fall's rather gloomy forecasts will be revised somewhat this spring to reflect the positive effect of a national upturn in housing starts.

Production in 12 Western states, which mill 65 percent of softwood lumber used in the United States, was reported at 94 percent of normal in the first week of April by the Western Wood Products Association. ''Normal,'' according to the WWPA, is 340 million board feet. In its April 7 report, the association said lumber production in the week ended April 2 was 319 million board feet.

For Idaho, Oregon, and Washington - probably hit harder than other Western states by the recession - the figures hold particular promise. The wood-products industry is Oregon's largest; in Washington it's second only to aerospace; and it is one-third of Idaho's manufacturing base.

California is second only to Oregon in the number of workers involved in the lumber industry. But the California economy is so vast and diversified that the sawmill activity has much less overall impact than in the other three states.

''I feel like recovery is on its way,'' says John Bennett of the Bennett Mills in Princeton, Idaho. In October 1981 his father said he had shut down one of his two mills and expected to close down the other soon. Prospects seemed grim.

Last Friday, John Bennett said that both mills were shut down - temporarily, because they had run out of logs. Seventy-five percent of their production goes into homebuilding.

Jeff Hannum, a state financial analyst in Oregon, says that ''there's optimism building in the forest products industry, but it's coming from a very low point.''

Mr. Hannum says a new forecast of state revenues for the 1983-85 biennium, due later this month, is expected to reflect the favorable effects of reduced inflation, increased corporate profits, and rising personal income.

Besides the ''moderate recovery'' in the timber industry, Hannum notes that tourism, which ''was the only bright spot'' in the Oregon economy last year, ''should fare quite well this year.'' Agriculture remains ''quite depressed,'' though lower interest rates and the federal PIK (payments in kind) program are expected to help farmers this year.

''You can see the logs and lumber moving out on the highways,'' says Ron Wallers of the Washington State employment division. ''There's also a noticeable drop in unemployment claims.''

But Washington's No. 1 industry - aerospace - remains in a slump. Airlines are losing money, Mr. Wallers says, and they're not investing in Boeing's new, fuel-efficient jets. Some 9,600 aerospace employees lost their jobs in 1982.

Despite the brightening picture in Idaho's timber industry, that state has a long row to hoe, according to Craig Fisher of the state division of financial management. He points out that, although lumber milling is ''starting to come back slowly,'' the Idaho mining industry shows no sign of recovering from the shutdown of the Bunker Hill mine and smelter at Kellogg last year. The other third of the state's ''big three'' - potato farming and processing, is a mature industry that is not growing, he explains.

And with many Idaho farmers taking advantage of PIK and withdrawing land from production, Mr. Fisher adds, the phosphate mining industry in the state could suffer from a drop in fertilizer demand.

Nevertheless, Fisher says he expects that an upcoming economic assessment will project an employment increase slightly higher than the 0.5 percent forecast last November. Like other analysts, Fisher says this is a ''transition'' period, and it may be summer or later before the strength of the recovery becomes evident.