Industry must work harder

By A. G. Matamoros Vice President & Chief Economist Armstrong World Industries, Inc.

EoLLOW-

I mg two years of the easiest pickin'since 19781979, participants in the building materials industry face a leaner harvestin theyear ahead. Clearly, a lot more imagination and perspiration will be required just to maintain momentum in 1985, as overall market potential grows at only half theraterealized thisyear.

Interest rate pressures have already pushed housing starts and existing home sales down from the levels reached in the second quarter. While the cost of mortgage money has eased recently, suggesting that no further erosion of housing activity is immediately in prospect, a new upward interest rate move around tax time next year could prove troublesome.

The decline in sales of older houses that has been underway since early summer, together with conservative buyrng behavior on the part of consumers with heavier debt burdens have lead to a slackening in home improvement activity. Still, the home fix-up and refurbishing market remains and will continue in 1985 to be one of America's most robust.

Finally, the single strongest market for building materials next year will be found in the nonresidential area where both large project and main street activity promise to expand vigorously.

Story at a Glance

Leaner harvest ahead. ..more work iust to stay eYen...'8s market potential growth half ol '84's...fix up and refurblshing remain one of Amerlca's most robusl businesses.