Dealers optimistic about '87

By Harlan Hummel Executive Vice President National Lumber and Building Material Dealers Association

Wf I rt' " l:: t'n"rT'l,',f ''ot regarded as a banner year for most retail lumber and building material dealers. Reliable indicators at this time point to the likelihood that 1987 will be equally as good. However, in the oil producing and agricultural regions of the country, as well as a few of the heavy industrial areas, the general economy is still down, thus Putting a damper on housing and related economic activities. But all together, 1987 holds promise for a brighter future for many dealers in these slow-growth areas as well.

Although we are oPtimistic about 1987, many complex issues are yet to be reckoned with that could substantially influence the final outcome. For examPle, the full impact of the new tax bill on our industry has not been deter- mined. If we are to enjoy continued erowth. interest rates must remain it or below today's levels. Inflation will have to remain at a moderate rate. A major undertaking of the 100th Congress will be addressing the potential problems of the huge federal deficits with no adverse impact on economic expansion.

All of these external factors will nlav an important role in our indusiryts perfoimance in 19871 some of the effects could be negative' However, because dealers have recently undergone tough economic times, many have emerged better equipped to oPerate their businesses successfullY. Lumber dealers throughout the countrY have had to become superior managers for inventorY control, employee relations, and investments in equipment and warehouse space; they have learned new skills that help bring about an imProved return on investment.

Building material dealers fortunate enough to have exPerienced a high level of growth in the last two or three vears should not become complacent with their local market posiiion. There will alwaYs be bxtremely strong forces vying for the consumers' dollars. The major competition may not be the lumber dealer or home center down the street; more than likelY it will be the automobile or larger appliance dealers. These competitors for the consumers' disposable income do an excellent job of marketing their products; they frequentlY are able to convince the home owner, or potential home owner, that a snazzy new automobile or hightech appliance will enhance their life style more than a new home or a newly remodeled kitchen or bathroom. Lumber dealers must learn to deal with these soPhisticated marketing thrusts.

Story at a Glance

lmpact of tax bill on industrY undetermined . higher levels of efficiency needed to improve margins and Profits... lumber dealers must learn to deal with soPhisticated marketing thrusts.

If we effectivelY coPe with the various forces that shape our industrv. we can compete successfully' If w"e do this, 1987 should be a sound economic year.