HOBBS WALL LUMBER CO.

Distributors ol REDWOOD LUMBER

4O5 Montgomery Streel, Sqn Frqncisco 4

Telephone GArfield l-7752

Year-End Review of Building Industry

Nerv York, Dec. 31-The construction industry has at least four or hve years of great activity ahead, but soft spots are shorving up that could precipitate a temporary decline almost any time, according to Harold R. Berlin, vice president and general manager of the Johns-N[ar-rvi11e Building Products Division.

To gear itself for the future, Johns-Manville as a rnanufacturer of building materials has for the past three years been preparing its sales organization for the impending return of competitive selling, u.hich is nou, here, N{r. Berlin said. Intensive sales schools ancl training courses for botl-r junior and senior salesmen, as n'e1l as expansion of the Johns-Nlanville sales organizati<>n, have becn part of this preparation.

"\\-e n'rust not close our eyes to the evidences of short ternr rveaknesses that are no\v plain to all t,ho observe the cotrstruction industry," Mr. Berlin said. "1\[oclernization ancl expansion of factory plant has been an outstandirrg prop of not only the construction boom but thc errtire general economic boon'r. This type of construction and cclmmercial building srrch as stores, restanrants, garages and offices is apt to be lou'er in 1919. During tl-re past three )'ears an immense number of nelr, bttsinesses openerl up recluiring a large volume of neu' constructior, and ren.rocleling of old structures. This trencl has nou' flattened ont and some of the nen. cnterprises are beginning to have a hard time in the grovn'ingly competitive n-rarket.

"In the past tn.o l.ezrrs the supplv of nerv dl'ellings has been increased by at least 2,000,000 based on available figures plus the estimated large number of self-built homes in communities requiring no building permit and nerv trailers produced {or permanent tlse. This has delayed much of the really urgent demand for homes from the market. It is inevitable, thercfore, that new spectllatively-built homes rvill be harder to sell from nou. on, tending to reduce construction of this sort unless the price can be reclucecl for the pocketbooks of people priced out of the market by the rise in building costs.

"This is by rro fileaus eas.y to do because the costs of proclucing n'rany building n.raterials and the cost of labor at thc builclirrg site have risen sharply. Inflationary forces are still \.er)' po\\'erful and the construction industry docs not operate in an economic vacuum. It is affected as mttch as any other indrrstrl. by the continual creation of nerv dollars that l;id up prices, by a high level of employment that leaves no large supplv of labor available for nerv operations, and by the armament economy that demands priority of scarce materials such as steel and other metals."

Nlr. Berlin pointed out that the rate of savirrgs has cleclined verl' sharply since the n'ar, rvhile expenditures of consumers, bttsincss ancl government have reached unprececlentecl heights. The effect of this, he said, is to limit the volume of savings available for construction, and this is already felt in many communities by a tightening up oi rrortgage money.

"There is, moreover, the very important fact that tl-re marriage boom is over. Neu' family formation has already fallen from its peak of over 1,000,000 in1917 and u,ill prob.