Unpredictable year ahead

By William P. Farrell Executive Director American Hardware Manufacturers Association

llf Htt-E the immediate casual- Ut ties of "the Crash of '87" have been widely reported in the media, the long-term consequences of the stock market's October 19 plunge remain unpredictable.

How the consumer hardlines market will be affected in 1988 by the Wall Street upheaval is difficult to gauge. Overall, most members of the American

Hardware Manufacturers Association (AHMA) will close out calendar year 1987 with strong numbers.

Through September 1987, the United States had completed 58 consecutive months of growth, tying a peacetime record. The same month, unemployment fell below 6% for the

Story at a Glance

Consequence of stock market nose dive unpredictable... buying binge slowdown ahead good management needed. . housing starts down slightly.

first time in this decade, The manufacturing sector had been reinvigorated, accounting for fully 400/o of the 132,000 new jobs created in September.

While most economists predicted a slowdown in the buying binge, the industry and the entire U.S. business community may suffer a good case of whiplash if the consumer slams on the brakes too suddenly next year.

Thus, for many hardlines producers, the term "caution" will be

The Merchant Magazine reinserted back into 1988 game plans. As one Business Week editor noted in the aftermath of "Bloodv Monday:" "The success of a company, public or private, will depend increasingly not on financial alchemy, but on good management."

While the purchasing propensity of the American consumer will play a major role in determining the condition of the hardlines market. so. too, will the messages emanating from our nation's capital.

While many economists are predicting recession in 1988, the outlook for hardware/home improvement products is strong. Unless interest rates start to run up, housing starts are expected to be in the 1.65 million range for 1988, down slightly tiom thd estimated 1.7 million this year.

Yes, U.S. hardlines prgducers are taking a "wait-and-see" posture for 1988. It's difficult to look into the crystal ball and predict what consumer spending patterns are likely to be next spring or what Congress may or may not do on the critical issues it faces. Beneath the "cautious" veneer, however, is a quietly confident industry poised for continued growth in the coming year. Only time will tell how our business handles the fallout from "Crash '87" in l 988.