Buildins Material Distribition/tgzS

D REDICTING what's going to I happen in building material distribution in 1975, is like trying to play tennis with no strings in your racket you might hit the ball, but chances are against it.

For distributors of building materials, the burgeoning home improvement/remodeling market will be a major factor in maintaining sales and profits for 1975. This market, at least so far, has acted as a counterweight to the lower housing starts experienced this year, particularly in the last half of 1974.

Over the past few years, NBMDA distributors have increasingly placed their sales emphasis on faster-turning, higher-margin Specialty Products. A recent survey of our membership showed that over 58% of our distributors handle Spe-

Story at a Glance

Home improvement/remodeling an important factor for distributors small hike in housin! starts ln late '75 .... more emphasis on specialty products.

Hardware

By Otto Grigg Managing Director Pacitic Southwest Hardware Assn.

By S.M. Van Klrk, Executive Vlce-President National Buildlng Materlal Distributors Association

cialty Products; a dramatic increase over the past several years. This increasing emphasis places our average member in an excellent position to service accounts specializing in selling the various consumer oriented retail dealers.

As far as the present low level of housing starts is concerned, it's the feeling in our association that not much improvement will occur until the last half of 1975 .... and then only a small increase in starts is predicted. t976, tho, should be an excellent year due to pent-up demand for new housing, assuming lower interest rates are available.

Again, that same survey of our distributor membership noted that the most important current problems facing our industry are increased operating costs, inflationL/cost of money, pricing instability, inventory levels/costs, shortage of materials (which now seems to be easing) and collections. These important factors are going to assume even greater importance in 1975. If these factors improve, 1975 will be an average to good year.

The old saw about "sitting on your hands and doing nothing" applies to the present market situation. For tliose individual's who will work hard, 1975 will be a rewarding and profitable year.

that will follow the changing demands of current inflationary trends.

Demands of inflation on cash flow will be acute as volume increases. This problem will be number one to management along with maintaining proper merchandise mix.

Consideration by management to distributor and manufacturer delivery flow is one phase of management control that will affect the total bottom line result. Being flexible, and having proper purchase controls, will assist management in meeting this problem. Almost daily inventory appraisal will become an operating must.

(Phase turn ta Wge lo)