The Michigan Daily-Wednesday, June 18, 1980-Page 7
WASHINGTON (AP)-The construction of new
homes plummeted 11.5 per cent in May to the lowest
annual rate since the depths of the last recession,
while the personal income of Americans remained
The Commerce Department said yesterday that
housing starts plunged to a seasonally adjusted
yearly level of 920,000 units, the lowest since
February 1975, when the annual rate stood at 904,000
IT WAS THE FIFTH consecutive monthly drop in
housing starts which are now 49 per cent below the
May 1979 figure.
"May was another month of bad news for both-
home builders and potential home buyers," said
Commerce Secretary Philip Klutznick. "I would not
underplay the difficulties facing the homebuilders.
They are critical."
Michael Sumichrast, chief economist of the
National Association of Home Builders, said May's
drop may represent the bottom of the current slump.
However, he offered little hope of a quick recovery
despite easing mortgage rates. And he predicted that
unemployment in the construction industry will con-
"BUILDERS WON'T START many houses until
current inventories are sold," he said. At current
sales rates, that could take about 12 months.
About 926,000 workers directly involved in home
construction have been laid off since the housing
slump began, Sumichrast said.
Another economist, James Christian, of the U.S.
League of Savings Associations, was less certain the
bottom has been reached. "The plunge should con-
tinue until the end of the summer. People won't see
mortgage rates below 12 per cent until then," he said.
MAY'S CONSTRUCTION level was the third lowest.
in history, Commerce Department figures show.
By the time the backlog of completed new houses
are sold, Sumichrast added, the building season will
be over in most parts of the country.
SAN FRANCISCO (AP) - A carpen- wide recession, with new housing con-
ters' strike spread to at least 30,000 con- struction for 1980 down some 50 per cent
struction workers in northern Califor- from last year.
nia yesterday, dealing another blow to Union negotiator John Ribeiro said
an industry crippled by recession. the union wants an agreement that will
Among projects idled was a $68 million obligate sub-contractors to hire union
restoration of the state Capitol. carpenters.
Most non-residential projects in 46
northern counties were shut down by RICHARD MUNN, executive vice
the strike, which union officials said president of the contractors
might ultimately involve 100,000 association, said the AGC has agreed to
laborers. force its members who use carpenters
either to sign the agreement or resign
WORKERS, INCLUDING 6,000 car- from the association. But he said the
penters and building tradesmen organization has no legal control over
honoring picket lines, began walking off subcontractors employed by those con-
the job Monday as 'union officials tractors outside the bargaining
argued with the Associated General agreement.
Contractors over the use of non-union Munn said he believes the AGC has
labor. offered the union a proposal that will
Jim Hirsch, spokesman for the 8,000- meet the carpenters' demand for
member United Brotherhood of Car- protection against subcontracting to
penters of America, said the strike non-union contractors by AGC mem-
could be a long one. "Our feeling is that bers in the present bargaining unit.
this is a pretty well-calculated move on In a meeting Monday night, contrac-
the part of the AGC to destroy the tors directed the AGC to continue talks
building trades unions, ours in par- on their behalf. If an impasse occurs,
ticular because we are the largest and said Munn, the bargaining unit will be
most powerful," he said. dissolved, and each contractor may
Among projects halted the day after negotiate independently.
the carpenters' contract with the AGC
expired Sunday was the glass-and-
::wa;:ns::-esThe CONSER VA TOR Y
concrete,' space-age Performing Arts ThCO SRV T RY
Center in San Francisco. The $38.5 CLAM CHOWDER
million center is supposed to be ready is full of clams
for the 1980-81 symphony season in Sep- New England Style.
ALSO STRUCK was the $115 million
Moscone Convention Center here,
named for the city's slain mayor,
George Moscone. In Sacramento, work
stopped on the $150 million Sacramento Attuned to your good taste
County sewage disposal plant and the M-Sat.11-9 516 E. Liberty
long-awaited state Capitol restoration. 994-5360 Second Chnce
The strike coincides with an industry-
Volcanic speed limit "
A new sign has debuted on Portland, Ore. streets-"Slow Volcanic Ash." After
the city was blanketed with ash from Mount St. Helens, traffic. in the city
became snarled and dust swirled through the air. Most of the flying dust was
caused by automsbiles.
State funds for ne~w-
'U' hospital secure
(Continued from Page 3)
the replacement hospital is by far the
largest. Clay called it "the biggest
capital outlay project this state has
ever funded (and) probably the most
complex as well."
The project is indeed massive,
especially in comparison to state ap-
propriations to the University's general
fund. For the 1980-81 fiscal year, the
University will probably receive less
than $120 million from the state's
higher education budget to pay for
salaries and instructional expenses.
David Murphy of the Senate Fiscal
Agency said there are roughly 22 other
projects being funded by the authority
at an average cost of $4 million to $10
JOSEPH OWSLEY of the University
Hospital information office said the
Building Authority's decision to back
the replacement project was based on
both the University's reputation as a
high quality institution and the demon-
strated need for the new hospital.
Owsley said it is not known how much
of the $210 million project the Building
Authority will fund. "The general
assumption is it will be something un-
der $200 million, but we just don't
know," he said.
Originally, the University's proposed
budget for the hospital project was $254
million, but it was trimmed to $210
million during the "certificate of need"
stage of planning.
To determine how much money is
needed for a project, state authorities
"look at the population and other ser-
vice statistics and determine the total
(hospital) bed capacity for an area,"
Clay said the state determined the
Ann Arbor metropolitan area to be par-
tially "overbedded" which led to the
reduction in thepropose budget.