So will they or won't they? Are builders such as DR Horton (NYSE:DHI) and Pulte (NYSE:PHM), to say nothing of the many other public and private builders, going to see ongoing increases in new housing construction, or is activity going to drop off? And it's not just the builders and mortgage bankers who want to know; building supply manufacturers such as Louisiana-Pacific (NYSE:LPX) have a vested stake in the answer as well.

The December quarter marked a strong capper to a very good year for Louisiana-Pacific, a leading supplier of OSB (oriented strandboard) and other wood construction materials. Revenue was up a bit less than 11%, while the operating income for the quarter more than doubled. Sales were led by very strong pricing in OSB (which supplies more than half of the company's revenue) as the company, like Eagle Materials (NYSE:EXP) with its gypsum wallboard, continued to experience a strong sales environment.

There's no sense in beating around the bush; the immediate future of this stock is going to be dictated by the direction of new housing construction -- or, rather, investors' perceptions of the direction. LP has a significant share in this market -- about one-quarter of the North American market -- and there are certainly acquisition and consolidation opportunities. But OSB isn't good for much if construction activity isn't strong.

While firm pricing might help up ease some of the blow if demand falters, I'm not sure why pricing would stay strong for very long in the face of slackening demand. In other words, obvious as it may seem, there needs to be actual growth in the end-user market for LP to see more good years ahead. And don't forget, too, that growth gets harder year by year as that baseline number gets bigger.

Still, LP has a very attractive balance sheet, since management has been relatively conservative with the cash it has accumulated. Accordingly, I would not expect to see deals that would put the company into dramatically new markets, but rather add-on deals that would bring new products, technology, or customers into the pre-existing mix.

I can't say I see much reason to buy these shares. If you think new housing demand will stay strong (whether bulwarked by Gulf Coast rebuilding or not), I suppose my projections for very modest near-term cash flow growth would be conservative. Otherwise, I think you'd just be better off finding a more promising idea.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).