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Show BABSON'S BUSINESS. FINANCIAL FORECAST Economic vitality seen during start of 1978 By BABSONS REPORTS INC.. WELLESLEY 1II1.LS, MASS, DEC. 29 Despite a number of developments that were either actually or potentially unfavorable, the nations business turned in a solid achievement for 1977. There were, to be sure, spells of stuttering, but the encouraging fundamental economic factors cited in our forecast at this time a year ago more than offset any negative considerations. So, overall progress turned out to be pretty much in line with our predictions. One of the most unexpected aspects of 1977 was the persistently defensive psychological atmosphere, in spite of the fact that accomplishment was even greater than the historical expansion rate of the economy (in real terms, after discounting the effects of inflation).- Much of the skittishness of public sentiment apparently came from such elements as exceptionally bad weather, encroachment of foreign goods, wrangling over terms of an energy policy, and getting used to the new national leadership. MORE PROGRESS ANTICIPATED The present upward phase of the business cycle began in the spring of 1975, Thus, as 1978 makes its debut, the business advance is already 32 months old according to the Federal Reserve Index of 1978 Industrial Production. By past standards, this is fairly close to a median life span, so there is no question that the ascending phase of this cycle is aging. The old adage Trees do not grow to the sky could well make one wonder whether time may not be running out for this latest economic uptrend. Sutdies made by the Research Department of Babsons Reports, however, do not yet show develop ment of the type of major imbalances that have brought past exansion phases to an end. Observe, for instance, the moderation in consumer spending as well as in additions to productive capacity by business, the absence of unhealthy speculation, and the swift corrections of inventory positions in virtually all parts of the business fabric. It is our opinion that this very state of quiescence should tend to keep the conomic uptrend going well into 1978. Whether the peak will come late in the year is another matter, one which we cannot foresee clearly at this moment. If the exigencies of an election year prompt g economic sufficiently early in 1978, business will undoubtedly react to such a fresh impetus and be able to postpone the danger of a crestover. In any event, it looks at present as though the nation's economy still has enough momentum to permit another stretch of progress on the business front for 1978 as a whole. top-hea- pump-primin- ECONOMIC PROFILE OF THE YEAR AHEAD Twelve months ago, Babson's predicted that the bulk of 1977's economic strength would be concentrated in the first half of the year, with the final two quarters expected to climb at a slower pace. This scenario has proved accurate. In the year ahead, it is likely that the performance will be repeated, with more vitality in the first two quarters than in the final two. Barring labor disruptions, the first three-mont- h span of 1978 may experience the sharpest rate of advanve. While the trend should continue upward throughout the year, the tempo will doubtless slacken in each successive quarter. All in all, 1978's results may turn out to be less impressive than those of earlier recovery days and will probably be extremely disappointing constant dollars that may be disappointing to many even though it is a shade better than the long-tergrowth rate of the economy. to those who insist on greater economic stimulation to make a significant dent in the nation's still vast peri of the unemploy-ed- . Contributions from the private and public sectors of the GNP should be fairly equitable. In the private sector, a sustained high level of residential building and further betterment in business outlays for capital equipment will be vital boltering influences on the economy as a whole. But such hopes are simply overambiti-ou- s in view of the realities of worldwide economic stagnation and inflation. Even so, the new year should still turn out to be a period of domestic economic growth roughly on a par with our long-tergrowth rate, and perhaps a bit better. THE SPECTER OF INFLATION Fortunate for the economy this past year was the constraint put upon agricultural and food prices by the hefty supplies of most items. Much of the lessening in the damage wrought by inflation as compared with 1976 was, in fact, attributable to prices, although in a sense it is regrettable that the nation's farmers have "subsidized'' consumers in the fight against inflation. Industria commodities helped to the extent that many primary metals showed a slippage in prices which restrained the tempo of inflation. Next year, however, conditions may not be so fortuitous, and inflation could average some 8 percent or perhaps a shade lower. Much, of course, will depend on the pricing policies of the OPEC nations. If they lift prices 8 percent or less PUBLIC SENTIMENT MAY REMAIN TROUBLED Regardless of generally favorable pros- year. pects, 1978 will not be a trouble-fre- e There will be. concern over the threat of increasing inflationary pressures and the resultant worry over the degree of credit restraint necessary to keep prices in reasonable check. There will also be anxiety over still more foreign competition, especially as it relates to the loss of domestic jobs, the nation's trade balance, and the balance of international payments with the latter two factors bearing directly on a weakened U.S. dollar. agri-base- GROSS NATIONAL PRODUCT The Gross National Product (GNP), a statistical expression of goods and services produced in this economy, should register a gain on the order of 2 percent in 1978 compared with 1977. The increment, however, will be bloated by the effects of inflation, and thus appear to compare favorably with the achievements of the past two years. But, after adjusting for inflation, the real GNP may show an advance of only about 4 percent, a gain in d in toto, it would not be unduly damaging in the battle against price runaways all along the line, but if radical OPEC leaders inflation prevail, a return to double-dig- it could occur in 1978. 11-1- INDUSTRIAL PRODUCTION The physical volume of production from the nation's factories, mines, and utilities plants slipped a notch early in 1977 owing to the harsh winter weather over many SMITHFIELD, UTAH, VOL 13, NO 52, THURSDAY, DEC trict's culinary water facili- ties. Wayne Stevens Co., of Boise was the apparent low bidder on the Phase One or well installation phase of the tion Phase Two section of the project with a bid of 3228,134. However, attorney J.W. Crowther, said that a qualification in the low bid for the second phase relating to a specific item could cause the board to accept the second low bid of $228,575 from Clair Berstien Const., Co., of Logan. Crowther The Boise firm made a bid one of only two of $21,970 made on that phase of the said that both bids were less than the engineers estimates and after a review by Farmers project. Agriculture Services of Blackfoot was the apparent low bidder on the storage reservoir and line installa has awarded the district a grant and a loan to complete the project, construction could start in January. project. Home Administration which , Summer cabin destroyed by fire Fire destroyed a small summer cabin in Cub River on Dec. 11. The cabin located with others along a scenic stretch of the river and owned' by Ken Johnson, Preston, was declared a total loss as firemen were unable to in time to extinguish flames. The Are was reported by a neighbor, Larry Beckstead, who noticed the flames in the early morning hours. Fire chief Alvaro Jones said the only item saved was stove. Total g a wood-burnin- loss was estimated at $25,000. Jones said the cabin was unoccupied and the stove was not believed to be the cause. Arson was suspected, Jones stated. SUPPORT FROM BUSINESS CAPITAL ' EQUIPMENT Despite the limited contribution of industrial activity, there should be more efficient utilization of productive facilities. Since some high cost plant and equipment were phased out in 1977, business capital outlays in 1978 may well post an advance in -- (Continued on Page 3) Dennis DeBoer is running for Congress. Beginning at the Northern end of Utah, Mr. DeBoer intends to run the length of the first Congressional District. Wanting to get to know the District better, he is taking advantage of his running abilities. Mr. DeBoer is presently employed at First Security Bank in Bountiful, Utah, as a On January 2, 1978, at 11:00a.m., the campaign run begins north of Richmond at the Utah-Idah- o Border (U.S. Highway 91). Mr. DeBoer will be running on Satur- Dennis moved within the year with his family to Ogden, Utah, where he attended local schools, and was graduated with a B.S. degree from Weber State days, weather permitting, beginning each time where he left off the week before. Then, in June, the DeBoer family will travel to the southern end of the District1 and Mr. DeBoer will run AT LIONS PARTY Mr. and Mrs. Marlin Gittens and Mr. and Mrs. Joe Timmins distribute ceramic lions to each of the members of the Smithfield Lions club during the recent holiday activity of the club. The four couples made the lions for distribution to the members. The Citizen Photo Lions presented ceramic statues Forty Lion members and wives and two guests, Kathy and Mike Christiansen, en- - joyed the Lions Christmas party at the Juniper Inn Thursday evening. The highlight of the evening was the presentation made by President Marlin Gittens and Joseph Timmins to each Lion member. The h special gift was a mounted lion ceramic long on a stand. It was hand- nine-inc- SOUNDS OF childrra'i voices singing Joyful Christmas songs permeated the air at the Cache Valley Mall Thursday. To the delight of parents, shoppers, teachers and children present, the Smithfield Summit sixth grade and electronic products, and building materials. Some of 1977's more hesitant lines, such as steel, should manage to chalk up at least modest improvement. Politician starts 'r un in the North Cache area openslowblds Fairview Water District ar 29, 1977 Falrview district board of directors will meet tonight to award bids for the construction of a new well and enlargment of the dis- sections of the country. But the uptrend which had started in the spring of 1975 was rapidly restored, and there was consistent progress until midsummer when there was another brief hesitation. Overall, however, the average for 1977 exceeded that of 1976, though the year-to-yepercentage increase was considerably more limited than the 1976 surge over 1975, as the Babson 1977 Forecast anticipated. While an extension of the uptrend into 1978 is expected subject to possible digressions resulting from labor disputes the rate of increment seems destined to year-to-yeshade off somewhat, though not as sharply as in 1977. Industrial output in general may rise around 5 percent in the new year, only fractionally less than during the year just past. The eco imy can obviously not count on much more than nominal strength from industrial production in 1978, but .ax relief of more than token proportions for both individuals and business could bring about a somewhat better showing. Among the more promising performers should be output of railroad equipment, electrical classes of Ms. Mitzi Anderson, itirs. Lois Sorensen, Mr. Voorls Hyde and Mr. Rex Woodward, performed by invitation during 0 Christmas season. Under the direction of Ms. Anderson and Lisa Webb, cadrt teacher. Sky View, painted by Linda and Marlin Gittins and Myrle and Joe Timmins. The lion was desert drift antique, two tone glaze with dark underneath on a walnut base and was seven inches tall. The ladies also received a key chain and address book with the Lion emblem as a gift. The program was Kathy and Mike Christiansen, who sang Christmas songs and narration, with Mike accompanying on the guitar. Mrs. Myrtle Cooper, pro- gram chairman, gave a Christmas reading to introduce the program and to conclude it. nd accompanied by the aame, the children's chorus sang popular numbers such as The Gingerbread House," "A Willy What Child Is This. Holly Jolly Christmas. Claus." "I saw Mommy Kissing Santa." "I'm Getting north for two weeks. The length of the District, and hence the state, should be r. covered by A native of Utah, Dennis DeBoer has an admiration mid-summe- and love for the State's unique personality. He feels he can represent this uniqueness in the United Slates House of Representatives. He has had experience in teaching and communications, and is presently employed as a bank officer at First Security Bank in Bountiful. His education includes a B.S. from Weber State in 1968, and an M.B.A. from Indiana University in 1971. He and his wife and two sons live in West bountiful. Mortgage Loan Officer. Prior to his career in banking, he taught High School Social Studies, Debate, and Seminary. Born August, 4, 1943, in Sacramento, California, College in 1968. While attending Weber State, Mr. DeBoer was active on the Student Senate, and served as Senior Gass President. He is presently serving as a member of the Board of Directors of the Weber State Alumni Association. In 1971, he received a Master of Business Administration degree at Indiana University. He is the son of Mr. and Mrs. Arend H. DeBoer of North Ogden, and is married to the former Barbara Bennett. They reside in West Bountiful, and have two sons, ages two and five years. Mr. DeBoer served in the British Mission for the LDS and has Church from 1963-6since been active in church leadership and teaching. His pastimes include long distance running and reading, along with being a husband and father. Sandra Claus." and Instrument accompaniment was provided by celloists' I,onnie Hansen and Donald; Violinists: Jennifer Gark, Pam Rasmussen and Laurie; Guitarists: Kim Johnson. Nothing." |