Selllng tothc scurH2

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Stronger 1987

(Continued from page 9) after the initial shocks and uncertainties, lower oil prices will help most sectors. The major decline in the value of the dollar on international markets should help U.S. manufacturers and farmers. The rapid growth of the money supply should help give an impetus to consumption and production, although it is not good news for the longer term outlook for inflation.

The tax reform of 1986 is highly complex, and it is difficult to sort out the many interacting and opposing effects. Most of the changes affecting real estate development are negative, ranging from severe limitations on the deduction of "passive" losses on income property from other types of income. i.e.. labor and investment income, to a near doubling of depreciable lives of structures. Perhaps the one real estate subsector that may be relatively benefitted by the tax act is owner-occupied, single-family housing. The mortgage interest deduction was preserved on first and second homes. Thus, some are arguing that this is one of the few "tax shelters" left to middle- and upper-middleincome households.

Turning to the West, there are wide disparities in both the recent performances and outlooks for the various states. Many states in the West are economically dependent on a few sectors that recently have been suffering major difficulties, most importantly, energy and agriculture. In general, the resource-based economies have been suffering declines that are often mirror images of their boom times of that later 1970s. In fact, we are forecasting negative nonfarm employment growth in three states in the West in 1987: Alaska, Montana, and Wyoming.

States in the West that are more diversified or have growing basic sectors include Arizona. California. Nevada, Utah, and Washington. In each of the latter, nonfarm employment growth is forecast to be equal to or greater than the 2.60/o increase forecast for the nation for the 1987 average level compared with 1986. Nearly every one of the latter states has important high-tech or aerospace manufacturing sectors that are benefitting from rising defense and commercial demand.

Arizona

(Continued irom page 26) time - even if it's a little late, you're still thankful." To many operations, credit problems amongst their customer mix have become a critical part of management function.

And what about 1987? Well, all indications in Arizona point to a growing market that is the envy of many other areas across the country. On the other hand, extremely tight and prevailing competition has many people justly worried about next year. To the wholesaler and retailer alike, it seems that the key is "you have to sell lumber!" The problem, however, is not so much in the movement of the lumber as it is in the cost of its purchase to the price of its sale. Just how much margin is required from what volume of business is a perplexing and constant question that must be successfully answered.

It is no fun to be caught up in the vicious circle of trading dollars between customers, banks and employees and having only worn out equipment result from the efforts.

To that end, one year passes and another begins and all ofus here at the ALBSA wish everyone a happy holiday season and most certainly a prosperous New Year!