Better times ahead

By Robert D. Peterson Chairman of the Board Palmer G. Lewis Co. Auburn. Wa.

Til:i,ff;T

Every part of the building sup- ply and forest products industry has weathered some tough times during the past three years. Those record breaking interest rates, highest since the Civil War, brought a lot of firms to their knees. Some didn't make it! But that's the bad news. Good news: the inflation rate and interest rates have come down dramatically. If these rates don't go back up, better times definitely lie ahead!

Our own distribution business bottomed out between the first and second quarters of '82. Business has been improving, very slowly, since that time. We think this trend is going to continue. It wouldn't be prudent to set our '83 expectations too high. However, a modest sales increase in

1983, combined with running abusiness as lean as possible, will have a very healthy effect on the bottom line.

My own personal estimate is that the inflation level in 1983 will remain around 60/o lt doesn't seem realistic to expect too much additional improvement in short term interest rates. It appears that they could certainly average around the 1290 level, in contrast to the horrendous levels

Sfory at a Glance

Slow upward trend . . keep your expectations for '83 modest. .. inf lation will remain around 6o/o ... conventional mortgages only slightly below 13o/o .. . repair & remodeling willmove up.

that started in the fall of'79 and persisted right up to the second quarter of '82.

Conventional mortgage rates in '83 will probably not get much under 1390, but some interesting variable plans, coupled with growing consumer confidence, will turn the housing curve in the right direction. The important repair and remodeling market will also benefit from the upturn in consumer confidence.

Our industry has been suffering for three long years. Many other industries began to feel the heat more recently. As a result, they will probably not enjoy the upturn that I think our own industry will see in '83.

Next year will probablY be another year where firms in our industrY should continue to pay close attention to business basics, especially to keeping expenses under control. However, if we can accomplish that objective, and tie it to a modest sales increase, we ought to be able to leverage our earnings up in the coming years. The best is still ahead!