Turbulence ahead

lly Robert 1,. Strickhnd ('hairman [-owc's ('ompanies, lnc.

I N PLANNING for the 1990s, it is I instructive lo compare and conrrasr this decade wirh rhe 1960s. llorh are postludes, following a popular and successful two-term Republican president.

F.arly in the '60s, the cry was to get the nation (the federal government in their view) "moving again." Today, the cry is to get the federal government under control! Then a hot war, a ground war, in Southeast Asia was imperceptibly in the future. Today, a hot war, a ground war, in the Middle h,ast is very possible, if not probable. So, against this background, let's consider l99l and our industry.

We have been in a recession since the spring in 1990. The "yes, no, maybe" opinions we read remind me of the medieval discussions of how many angels can dance on a pinhead. Consumers' actions confirm their beliel in a current recession, therefore, we are in one, and the prudent thing is to believe that it will last throughout 1991. I hope l'm wrong here, but what lactors exist lbr a quick reversall l:or years I have believed that the '70s were over, and so were the days ol'2 million housing starts. That still holds, but a twin belief that starts would not dip to I million may be severely tested or proven wrong this year and/or in 1992. All of us knew that demographic trends were a downer for housing this decade. Who predicted this simultaneous devastating S&L llasco and real estate price depression I

The home center business outlook is good. The llome lmprovement Research lnstitute forecasts the total home improvement products market willgrow by 3'Xr in 1991, to $lll.4 billion! This represents more than double from the $50 bil-

Story ataGlance

Honre center buslness ls good d€splte receeslon... salee of $111.4 bllllon In'91, comparedto $50 bllllon 10 yearc ago a soc* ond doubllng expected in thls decade. . .llx-lt merchandlslng replacing ffx-it+rp.

lion postecl ten years ago. Leaders in home center retailing believe it will double again in the '90s. Although this 3(),[r increase is a slowdown in rate of growth, it is quite positive, given the economic scenario we face. Product categories will perform differently in a recession. obviously, with "l'ix-it" merchandise faring relatively better then "lix-it-up" categories.

Political developments always throw caveats at future outlooks. In 1991, this is an even larger factor. 1990 brought the "summer and autumn of our discontent" to the American populace. Since the reversal on the tax issue by the president and the subsequent budget squabble came after the primaries, the "throw the rascals out" feeling did not produce a great change in Congress in 1990. The feeling will reappear with vengeance in the 1992 primaries! Couple that with the Presidential election, and expect to see the jousting and maneuvering begin by January, 1991.

Should a hot war break out in the Middle East, I expect it to be more like Panama than like Vietnam. "Surgical strikes" are myths and air power alone won't win it, but our military leadership is world-class, as is our political leadership in international issues.

A hot war would clearly adversely affect oil prices, inflation, the consumer economy of Washington, I).C., and other military bases, but could perversely boost consumers' spirits as they "rally round the flag."