<B>Domestic Paper Production Shows Modest Improvement</B>

The domestic paper industry is showing a modest improvement in production levels, compared to the much softer market for paperboard.

According to the American Forest and Paper Association paper production over the first nine months of the year is up 0.2 percent from the same time last year. The improvement is primarily due to the sharp improvement in the newsprint sector.

For September, paper production stands at 3.791 million tons, pushing the nine-month total to 34.399 million tons.

Leading the way was newsprint production, which climbed 4.1 percent between the two years. For this year production stands at 5.531 million tons. For September, however, production dipped slightly to 584,000 tons from figures the same time last year.

While newsprint production is a strong area for the paper segment of the domestic forest products industry, printing and writing paper production, the largest component of the paper business, posted a 0.2 percent decline between last year and this year. For the first nine months production stands at 20.310 million tons.

Tissue paper, the third largest component of the paper business, however, also posted an increase for the first nine months. According to the AFPA tissue production stands at 5.143 million tons over the first nine months of this year, a 1.1 percent improvement from figures the same time last year.

The final component of the paper industry, packaging paper and other paper grades, saw the biggest drop for the year, 4 percent. Total production figures stand at 3.414 million tons. The biggest segment of the sector, unbleached kraft paper, saw an 8.2 percent drop between the two years.