The Michigan Daily-Wednesday, June 18, 1980-Page 7 New home starts off 11.5% last month 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 virtually stagnant. 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 units. 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- tinue unabated. "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. California carpenters strike grows 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. tember. 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 million. 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. Clay said the state determined the Ann Arbor metropolitan area to be par- tially "overbedded" which led to the reduction in thepropose budget.