Consumer confidence is keystone

By Al Leitschuh, CAE Executive Vice President National Building Material Distributors Association

I USf when many rhoughr the U, 1988 economic outlook for building products was crystal clear, a major upset in the world financial wrcT market has a lot of people scratching their heads and rethinking their earlier predictions. Not that NBMDA members were pre- many members were confident that a relatively stable forecast for the market was in order.

And why not? Before the recent events on Wall Street, 1988 looked to be a year of stability. Building material sales were predicted to rise slightly above inflation rates at 4-50/0.

The housing market would continue to hold its own with an estimated 1.5 million single housing units, while multi-family and commercial would continue to slump. This largely due to the 1986 Tax law changes and an over-building of commercial units.

Once again, the remodeling and repair segment of the building materials market was showing strong signs of flourishing in 1988 as consumers continued to be more energy conscious and interested in improving their property value.

The end-dollar opportunity for 1988 looked to be consistent with 19871 however. if the world financial market continues to fluctuate, consumer patterns may be affected.

In addition, 1988 is an election year. Election years bring about a major unsettling of fiscal tax events of their own. The combination of these two factors and their effect on the building materials market is difficult to predict.

Story at a Glance

Consumer confidence will dictate building materials market . election years unsettle fiscal tax events... economy will depend on control of deficit, spending and trade imbalances.

Until the government succeeds in controlling deficit, spending and trade imbalance problems, the 1988 economic stability will remain in question.