National Economic Report, January 1993

A flurry of possible movements in important economic indicators (including the all-important real estate categories; in the last two months of 1993 had many economists forecasting that the U.S. economy will continue to grow at a healthy clip in 1994, with no slumps to slow the upswing.

Besides all the real estate activity being generated by the lowest mortgage interest rates in two and a half decades, many other economic indicators took healthy jumps in November and December. Among them: The Conference Board reported that its consumer confidence index jumped almost 11 points, from 60.5 to 71.2, between October and November. The 71.2 reading was the highest point consumer confidence has been at since January 1993, according to the Conference Board.

Consumers are spending at a healthy clip. Retailers reported strong revenue increases in September, October and November, according to USA Today, and revenue at shopping malls during the crucial Thanksgiving weekend ran 4.6% ahead of last year's.

Manufacturers are enjoying rising demand for their goods, USA Today reported. U.S. automakers boosted their fourth-quarter production to a level that was 12% ahead of fourth-quarter 1992, and they plan to raise production slightly more in the first quarter of 1994. This is in response to very robust demand: In mid-November, sales were up a remarkable 16% over the same period in 1992.

But the most important good news, particularly for pest control operators who do a good deal of termite inspection and pre-treatments, came in the real estate categories. Mortgage rates hit 25-year lows in October, and have risen only negligibly since. That has sparked a spectacular boom in sales of new and used homes and in housing construction. New home sales soared to an unprecedented 14.9% gain in September, and slipped back only 6.5% from that torrid pace the following month. And sales of existing homes and housing starts have both shown steady, solid growth for several months.

The housing boom is adding considerable fuel to consumer and business spending - and, it would seem to follow, spending for termite work - and should continue to do so for a good number of months, even if home sales level off, according to economists.