Building materials outlook bullish

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

Etter

times lie ahead!

It was difficult to remain an optimistthrough the years '80-'82. However, those gloomy years are behind us. Now it's an established fact that business has been a lot better in '83, and a lot of us expect a comparable increase in '84. Our own company is bullish about the year ahead, and here are some of the reasons:

(1) There have been wonderful developments in the inflation rate area during the past year. For example, the rate for '83 will come in fairly close to 4s/0. And based upon everything I observe and read, the rate in '84 will probably stay under 5v/0.

(2) As a result of our recent "depression years," wage pressures have definitely weakened and will probably remain relatively soft. Hopefully, the escalation of wages, on an annual basis-come rain or shine-has ended for the immediate period ahead.

(3) Interest rates have come down a little, have stopped jumping up and down, and will likely continue to soften in the year ahead. Sure, they're still high by historical standards, but who can forget those 2090 levels in the spring of 1980!

(4) Housing starts in 1982 fell to their lowest level since World War II. At the beginning of '83, most predictions were for about 1.5-1.6 million starts in '83. It now appears that the final '83 total will be close to 1.7 million-an increase of more than 6090 over the previous year. We certainly can't knock that! Pressed for an exact figure, I would bet that '84 starts will be a little higher than they were in '83-say 1.7-1.8 million.

(5) And let's not forget the demographic statistics. It's a fact that there will be approximately 12

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Story at a Glance

Lower inflation. .weaker wage demands. softer interest rates. . satisfying of housing demand behind schedule. tax exempt bonds & variable mortgage rates can ease pinch. . starts may be as high as 1.8 million next year.