Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1938-01-06
Predictions Point To Low
Business Start With Squirt
Toward Close Of Year
{ Continued from last weekly

as good a year Tor statesmen, mer-
chants, and advertising people as
1887. Things are pretty slow right
now and will continue poor into 1888.
However, as the months tick away,
the resistance clouds should blow off
ard by late next year the sellers
market should be on the way back.
Then advertising Image will have
another surge and commission checks
will again bulge. The 1887 national
income estimated at $70,000,000,00O
will not quite be equalled despite
1885 strong secondhalf sprint.
Retail Sales, Living Costs Lower
The national income roughly de-
termines the volume of retail trade.
Hence, / expect retail sales will aver
age less in 1888 than 1887. They will
be slow during the early months; but
they will follow the strong business
uptrend as the monthly pages are
torn off .he 1888 calendar. By next
Christmas, volume of retail trade will
have a good chance of breaking all
records since 1929. Shading of price,
tags between New Years and Easter
will help boost sales.
This drop in retail prices is good
news for the householder. It looks
now as though the cost of living
which has been rising steadily since
1888 will give ground early in 1888.
The average for the New Year, how
ever, should show only a minor drop
as food prices may touch off new
rise along about Labor Day. From
current levels, your clothing will reg
lister modest decline by next Christ
mas; food Should be up slightly; coal
will show little change; fuel oil win
be firm to lower; and rents will be
unchanged.
Why Building Slows Down
One of the major cogs in this cur
rent business recession has been the
sharp letdown in construction. Build
ing material concerns and building
workers both showed up costs out of
all reason during 1936-37. A house
which cost $4,000 to build in Deem
Der; 1885 would cost nearly $500 to-
day. Naturally, demand for new
homes has slowed up in face of this
unwarranted boosting of costs. Home
building is down 20 per cent from the
1887 peak, is below a year ago, and is
still falling. ia .
My thought is that it will continue
to drop until after business has be-
gun to retrace its steps late next
Spring. Sometime next year, however
home building should again be hum
ming along. The 1887 peak may even
be topped so that the average volume
of new homes for the New Year could
be above last years level. The new
Government housing program could
also give the industry big lift. 1t is
even possible that the home building
boom which l really expected to de-
velop in 1887 will start late this COM
ing year.
Real Estate More Active
Private non-residential construction
on the other hand, will be lower. II
now see little incentive for new plant
next year. Public utility
work, however, may take up the slack
caused by PWA pulling in its horns
OIL public works projects. A decline in
building costs should help volume inI
the early months; but before 1888
closes costs win reverse their field
again and be on their way to new
peak.
These higher costs win help real
estate values. New home prices, which
are now being shaded here and there,
will strengthen. However, hold little
hope for an increase in old house
values, barring drastic initiation. Good
vacant property and modest well-laid-
out modern homes are among the best
investments person can make today.
For that reason / feel that 1888 is
going to be a good year for realty
men-with a slow start and an active
finish.
Stocks To Rally
This same rough plan should also
hold for stocks. expect to see the
markets fly the revival signal before
1888 is too old. 1t would be silly to
predict they will, or will not, break
through their 1897 March peak. It
makes little difference whether they
do or do not, for good stocks at cur
rent prices, in my opinion, offer ex-
cellent profit opportunities.