1983: a better year for home centers

II'HILE the UU mediocre short-term indicators for the home center industry, particularly with regard to housing, have been discussed at length in the media, we feel the need to stress the "positives" of this expanding industry right up front. Its past and continued growth can be attributed to several favorable economic, environmental and social factors, the most important of which follow:

Favorable Factors

(l) The age of the housing stock increases the need for repairs and improvements, while the in-

By Frank lY. Denny President, Home Centers Division W.R. Grace & Co.

Story at a Glance

PosltlYe factors regardlng home centers outwelgh the negallves... costs wlll Inhlblt future home conter bulldlng... competllion wlll put more prossure on gross margins and operatlng expenses.

creasing cost of new housing encourages people to maintain and upgrade their existing homes. The median sales price of a new single family house rose from $48,800 inl977 to approximately $72,000 in 1982, for an increase of 8.190 annually.

(2) The 254 year old age group, with prime emphasis in the 35-44 sector, which represents the target customer, will g;row approximately 2.890 and4.lo/o per year, respectively (1982-1987), compared to the total population growth of l.l9o. The annual growth rate for the 2544 year old age group in the South is forecast at3.3tlo.

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A Year of Transition

By Ronald P. Hogen Vice President Distribution Division

EOR South- F ernbuildingproducts dealers, 1983 will be a year of transition. Next year should see the beginning of a sustained recovery from our industry's worst depression in memory. And confirmation of market trends we have seen developing the past three years.

We expect some very good housing years in the 1980s, perhaps beginning as early as next year. But wethink our

Georgia-Pacific Corp. Atlanta. Ca. industry's environment has changed -permanently. Georgia-Pacific is working to help dealers service a market very different from the 1970s, a market in which commercial and industrial construction, repairs and alterations and non-residential construction will rival housing in importance. And a market in which multi-family housing and smaller, attached single family homes will win greater acceptance.

We will likely see a return toward a more traditional housing market in the next few years, but with added demand from the40million people who will enter their prime home-buying years during the decade. Housing will be purchased more for shelter and less for investment. Homes may be smaller and cost more. But

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Story at a Glance

Southern houslng starts wlll exceed 750,000 a 25% hlke from '82 . . &% of the U.S. nonresidentlal bulldlng wlll be in the South more remodel. ing and rehabol existing struc. tures.