Western economy iffy

By Dr. C.E. Bray Assistant Vice President & Regional Economist First Interstate Bancorp

Housing is expected to have a nesative influence on national ero-wth in 1987 and 1988. Housing itarts are estimated to have moved down to 1.65 million units in 1987 and forecast at 1.56 million units in 1988. Single-family units are expected to be down primarily due to increased mortgage rates. High vacancy rates and the loss oftax advan-

Story at a Glance

New housing and general construction in the West will be off . . 1.56 million housing starts in '88. both single family and multiPle housing units will decline. reduced domestic lumber utilization; repair & remodeling will be bright spots.

tages will result in the decline in multiple-family units. The housing sector in the West is expected to reflect these national trends.

Housing starts for the nation during the first nine months of 1987 were down 10.20/0. The largest decline occurred in the South where housing starts decreased 160/0, followed by the West where starts declined l0o/0.

During the first six months of 1987, construction employment was also down in the West. The largest declines occurred in Utah, Arizona, and Colorado. California and Nevada. however. were two states which experienced vigorous growth in construction reflecting their continued overall high rates of employment.

The declines in new housing and construction are expected to result in reduced domestic lumber utilization in 1988. Repair and remodeling, therefore, will be the bright spot in domestic lumber utilization.