proportions have so complicated the financial situation that a readjustment has been necessary, and it is this readjustment which has produced a state of confusion and hesitancy on the part of capital that has, and will for some time yet, require very careful management before it can be overcome.
All of these governing and conflicting elements make the task of analyzing their effects on the construction work of the country a most difficult one and render it almost impossible to prognosticate the future with any degree of certainty. In undertaking to write this review The American Architect has thoroughly studied conditions as they were found throughout the country by its representatives, and in addition has obtained letters from representative architects, contracting firms and material men.
A study of the building situation during the past year reveals much that is gratifying. While it is generally believed that construction work has been almost entirely stopped, the contrary is true. As estimated in dollars and cents the sum total for the first ten months shows that the net decrease has not exceeded 35 to 40 per cent, the difference being, as noted elsewhere in this issue, that instead of the expenditure being made for monumental works, skyscrapers and speculative projects, it has been transferred to the industrial field. Factories all over the country and in all lines of endeavor have been doubled and tripled in size. Numerous new ones have also been constructed, and many of them are in entirely new localities where there had been no activity previously. Never in the history of the nation has there been such a shifting of the industrial population as has occurred during the past twelve months. As a consequence the demand for housing facilities has far exceeded the supply, although almost a continuous erection of such buildings has been in progress, and there is to-day a housing project under way for one concern in the vicinity of New York which involves 3000 in one undertaking and 1500 in another.
With this brief discussion of the various reasons for the lack of activity in construction work during the past year we can now turn to see what may be in prospect for the coming year. While it would be too much to expect that conditions would return to normal, or even near it at once, there does not seem to be any reason for a pessimistic view of the situation. Already, owing to Government price fixing, steel and cast iron products are beginning to show a decrease in cost. The order books for November of one of the big steel-producing companies are more nearly clear of unfilled orders than they were at the end of last month by about a million tons, and nearly 50 per cent below the same books a year ago. This means that if the reduction continues, and there is no reason to doubt that it will.
in a very few months this company and probably others must increase their orders, and, as supply and demand always control prices, a still further reduction may be possible. This is stated with no idea that the prices of any construction material will reach their former low level in many years to come,, perhaps never again, but simply to show that the end of the period of readjustment earlier referred to is becoming apparent. This movement in one branch of construction will no doubt be followed more or less by similar ones in other branches, and a normal, basic level will be established of a more stable character, which will hold for some years to come.
The Government is every day entering into large contracts for almost every kind of manufactured material, and this means in many instances increase of factory accommodations, so that industrial building, great as it has been in the past year, must continue to grow during the coming one. These contracts, with others for foodstuffs and farm products, mean the outpouring of immense sums of money. This money obviously will be reinvested, and there is no reason to doubt that a large part of this will flow into building channels. It is not as though this money, were to be locked up in vaults and lie idle. It will be put into circulation again at once, and not less than 80 per cent of it will be expended in this country itself. This certainly gives a good basis for the belief that it is not so much the lack of money in the country as it is the unsettled panicky fear that pervades everywhere which has brought about this period of stagnation.
Since this is true, there should be no reason to doubt that there will soon be a revival of construction in all directions. It is the opinion of architects and people in the building trades that it is not so much the actual high cost of materials which retards construction as it is the instability of prices, which prevents an accurate estimate of costs, of necessarily first interest both to the investor and to the contractor.
This is already apparent, for within the past two months or so several projects that have been held in abeyance for the past year are again being put under way. Rents, particularly in the large centers of population, have advanced, and the demand still exceeds the supply, so that with more careful planning and more economical construction methods, with less attention given to frills and ornamentation and more to necessities, building for investment should once more come to the front.
There is one unknown element in the equation which unless wisely handled may upset all calculation. That is Government action as to what shall be designated “essential” and what “non-essential” industries. This may prolong the period of read
All of these governing and conflicting elements make the task of analyzing their effects on the construction work of the country a most difficult one and render it almost impossible to prognosticate the future with any degree of certainty. In undertaking to write this review The American Architect has thoroughly studied conditions as they were found throughout the country by its representatives, and in addition has obtained letters from representative architects, contracting firms and material men.
A study of the building situation during the past year reveals much that is gratifying. While it is generally believed that construction work has been almost entirely stopped, the contrary is true. As estimated in dollars and cents the sum total for the first ten months shows that the net decrease has not exceeded 35 to 40 per cent, the difference being, as noted elsewhere in this issue, that instead of the expenditure being made for monumental works, skyscrapers and speculative projects, it has been transferred to the industrial field. Factories all over the country and in all lines of endeavor have been doubled and tripled in size. Numerous new ones have also been constructed, and many of them are in entirely new localities where there had been no activity previously. Never in the history of the nation has there been such a shifting of the industrial population as has occurred during the past twelve months. As a consequence the demand for housing facilities has far exceeded the supply, although almost a continuous erection of such buildings has been in progress, and there is to-day a housing project under way for one concern in the vicinity of New York which involves 3000 in one undertaking and 1500 in another.
With this brief discussion of the various reasons for the lack of activity in construction work during the past year we can now turn to see what may be in prospect for the coming year. While it would be too much to expect that conditions would return to normal, or even near it at once, there does not seem to be any reason for a pessimistic view of the situation. Already, owing to Government price fixing, steel and cast iron products are beginning to show a decrease in cost. The order books for November of one of the big steel-producing companies are more nearly clear of unfilled orders than they were at the end of last month by about a million tons, and nearly 50 per cent below the same books a year ago. This means that if the reduction continues, and there is no reason to doubt that it will.
in a very few months this company and probably others must increase their orders, and, as supply and demand always control prices, a still further reduction may be possible. This is stated with no idea that the prices of any construction material will reach their former low level in many years to come,, perhaps never again, but simply to show that the end of the period of readjustment earlier referred to is becoming apparent. This movement in one branch of construction will no doubt be followed more or less by similar ones in other branches, and a normal, basic level will be established of a more stable character, which will hold for some years to come.
The Government is every day entering into large contracts for almost every kind of manufactured material, and this means in many instances increase of factory accommodations, so that industrial building, great as it has been in the past year, must continue to grow during the coming one. These contracts, with others for foodstuffs and farm products, mean the outpouring of immense sums of money. This money obviously will be reinvested, and there is no reason to doubt that a large part of this will flow into building channels. It is not as though this money, were to be locked up in vaults and lie idle. It will be put into circulation again at once, and not less than 80 per cent of it will be expended in this country itself. This certainly gives a good basis for the belief that it is not so much the lack of money in the country as it is the unsettled panicky fear that pervades everywhere which has brought about this period of stagnation.
Since this is true, there should be no reason to doubt that there will soon be a revival of construction in all directions. It is the opinion of architects and people in the building trades that it is not so much the actual high cost of materials which retards construction as it is the instability of prices, which prevents an accurate estimate of costs, of necessarily first interest both to the investor and to the contractor.
This is already apparent, for within the past two months or so several projects that have been held in abeyance for the past year are again being put under way. Rents, particularly in the large centers of population, have advanced, and the demand still exceeds the supply, so that with more careful planning and more economical construction methods, with less attention given to frills and ornamentation and more to necessities, building for investment should once more come to the front.
There is one unknown element in the equation which unless wisely handled may upset all calculation. That is Government action as to what shall be designated “essential” and what “non-essential” industries. This may prolong the period of read