Looking Better Every Day

By Bruce Lippke Mgr., Marketing & Economic Research Weyerhaeuser Company

products industry

T[?;:',l*n 1977 is looking better every day.

But it may come as some surprise that the reason for that increased optimism is at the expense of a lower growth outlook for other sectors of the economy. The economy has weakened .more than expected from the rapid pace established early in the recovery.

The slow recovery in investments and weaker economy have removed the threat of an early clash between a strong growth in the economY and FRB policy. Short-term interest rates have actually declined, so that 1977 now looks like a good year for housing and the building materials industries. The inflows of funds into thrift institutions have remained strong and should continue strong well into 1977. Funds should be adequate for 1.25 million single-family units in 1977 and possibly more than 13. That is a very strong market that can be compared only .with the all-time peak year of l.3l million in 1972.

More uncertainty remains on the multi-family side, but continued gains in employment and higher occupancy rates should mean continued improvement in the attractiveness of apartment investment.

Total housing starts of 1.8 million or almost 2U/o above 1976 now looks