Speci al Oruer Timbers

vnnvTHING in general

E seems to be low. We have low inflation, low productivity, and low economic growth, but constructionactivity has been relatively high when compared to the last few years. General economic indicators con-tinueto be weak, but there is no conclusive evidence of a near term downturn. The numbers aren't bad, but we lack enthusiasm or vigor.

What will be the effects of the tax law? No one really knows. Will there be a meaningful shift in after tax income toward the low income, middle income or upper income segments of our population?

The best guess is that the middle income group will be the greatest beneficiaries of the tax reform package which bodes well for the future of home building. This large group of consumers, if they choose to, can be the stimulus for a continuation of our present housing activity, particularly in single family dwpllingsat worst, 1987 could be off l0o/o from the 1986 starts.