New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-10

Labor, Lumber, Steel, Brick and Cement Have Cut
Prices; Additional Reductions Impossible at This
1 Times 4OePer Cent Below Peak Levels of 1919

IlThe fact remains that the effect Of such
ISa cut, II 1t Is made, has already
been discounted by the increased pro-
| duction on the part Of the workmen, SO
4 that it Is doubtful IL any further ma
/ teriai reduction in the cost Of the
i finished building can be looked for in
4 the, labor item for one or two seasons
/ at Sleast.
No Recessions in Material Prices
Turning to the material account. the
i situation is little more complicated.
| Most of the manufacturers of building
materials have made very deep cuts in
!enelr sales prices during the current
Tyear, so deep, in fact, that it is said
that many of them are actually selling
below cost at the present time. In
other words, they are operating at a
loss in the hope of stimulating demand.
IF this is the case 1t is obvious that no
Esmcre cuts can be made in the cost of
amaterial.
The principal material used In such
shouses as The Tribune is illustrating
?is, of course. lumber. An analysis Of
tine present cost of rough lumber in the
New York market shows that there is
very little margin between the actual
icost Of producing this lumber and the
j sales price, and shows also a very IA
svorable comparison between the pres
sent price of lumber and the pre-war
price. when the large increase in
freight rates which has occurred dur
' ing the last few years Is taken into
consideration.
In the case Of cement, reductions al
general lowering Of prices in other
lineA Furthermore, many of the East
ern states have undertaken large and
expensive programs for road building.
SO that the demand for this product IS
close to normal. This means that
many of the cement mills are operating
at about capacity, and that any in
crease in demand would tend to in
crease costs. Some slight reduction in
the selling price Of lines and plasters
Is looked for in the near future, but
such reduction if 1t occurs is likely
to be Offset by an increase in the sales
price of brick. During the last year
brick has been used faster than it has
been manufactured. AS q result pres
emit stocks are reported to be depleted
lar below normal requirements, This
lack Of supply will be followed prob
ably by rising prices, should the de-
mand for brick increase in the near
future
: MeCaiS are reported at abnormally
low prices generally. This is certainly
true of steel, and steel is the baron
eter by which the rest of the list NAV
be measured.
No Change for Two Years
/ One other consideration is Of i'm
portance in the present situation. owing
to the unsettled conditions which ex-
list, many builders have been accepting
contracts at abnormally low prices in
the hope that such contracts, while not
involving any profit for them, may tide
them over slack period. As result,
a great deal Of work has been under
taken during recent months at actual
ret cost figures, or even below. The
moment things generally become more
stable this condition will cease to ex-
list. Many builders think that stiffen-
ing. of prices is already apparent. Few
believe that they will go lower, at least
for considerable period of time.
In general. then, it would seem that |
8 prospective owner need not expect to
build at any lower prices than those |
which prevail to-day during the next
eighteen months or two years. After
that time it is possible that the down
ward tendency will continue. This is
as far as it is safe to go with the evil
dcace at hand.