Numbers Show Housing Industry's Bellwether Role In Economy A couple of number have been released in the last couple of days that again illustrate what a pivotal role the housing/real estate industry plays in the economy. One of the numbers, from the American Furniture Manufacturers Association, shows that furniture buying is surpassing record levels and more strong years are forecast for this year and next year. The other number, from the copper industry, indicates the price of copper is falling - a direct result of an anticipated slowdown in the construction of new homes. For four consecutive years new and existing home sales have pushed to record levels, capped by 1999 sales of 5.2 million existing homes and about 875,000 new homes. Furniture sales historically follow home sales, beginning to go up usually about a year after home sales begin moving. After home sales peak, furniture sales tend to remain strong for a few years and then drop off. The American Furniture Manufacturers Association reports furniture sales began surging in 1997 when growth accelerated by a 8.3 percent. In 1998, there was an increase in sales of 5.6 percent. In 1999, the overall industry growth was again pegged at 5.6 percent ($61 billion in sales). Executives say sales should go up by another 3 percent in 2000 and yet another 4.6 percent in 2001. "Over the past several years, the furniture industry has benefited from a booming economy," said Joe Logan, the AFMA's vice president of financial services. "As economic expansion continues, we expect to see the same within our industry." Alternatively, businesses related to housing construction already are moved into post-boom operations. Copper already is selling for 4.5 percent less it was two years ago when demand from the building industry was at its peak. Since then, however, officials note that mortgage interest rates have crept back up above 8 percent and that housing is beginning a downturn. "At some point higher interest rates are going to have a cooling effect on the whole U.S. economy, and that's going to be reflected in lower copper prices,'' said Stanford Shanker, president of Metal Commodities Corp. in St. Louis. Even as copper prices decline, more copper is becoming available from foreign producers, putting even more pressure on prices. Currently the National Association of Realtors is projecting home sales in 2000 will be around 4.89 million, which will be third highest level in history. Mortgages interest rates are expected to continue to climb in the early part of the year before declining again this summer. | 
