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CREDIT-CRUNCH COMPLAINTS WARRANT CONCERN

It might be wise to listen to all those complaints of a credit crunch, even if many of them are coming "merely" from builders and developers.

A credit crunch anywhere in the economy can spread economic woe far and wide.Many business economists have tended to discredit credit crunch claims, arguing that the national statistics fail to show one; much of the evidence is anecdotal; and any problem is restricted to builders.

Other analysts contend, however, that even a slight infection in just one limb can spread quickly to the entire body. Builders clearly are involved in a credit crunch, which they say is bound to hurt other businesses.

This becomes clear when you consider the ingredients, the trades and skills, the manufacturers, retailers and wholesalers involved in building just one, 1,700-square-foot single-family home.

Lumber, of course, some 9,726 board feet of it. And 55 cubic yards of concrete, 1,992 square feet of asphalt shingles for roofing, 2,500 square feet of insulation, 6,484 square feet of wall board and 90 feet of ducting.

If you find it difficult to visualize those items, then consider these: 55 gallons of paint, 302 pounds of nails, 12 windows, three bathtubs, three sinks, 15 kitchen cabinets, and, of course, the range, refrigerator, dishwasher.

All of those items must be assembled in a housing unit, and that involves people such as architects, draftsmen, surveyors, masons, plumbers, roofers, painters, paperhangers, electricians and a dozen other vital trades.

Most of these are local business people, but the locals order from regional suppliers who get their materials from factories, which are situated throughout the country and which order from raw material suppliers.

In all, according to the National Association of Home Builders, which bases its estimate on U.S. government figures, the construction of just one house means 1.8 man-years of employment.

Translated, that could mean almost 22 months of work for one person or, for example, about three month's work for seven.

Thus, while the credit crunch in building may not to date have made an impression in national statistics, smart economists, including Federal Reserve chairman Alan Greenspan, are concerned.

Martin Perlman, NAHB president, says the crunch already is destructive. "Builders are being indiscriminately cut off from the credit markets. Production is dropping. People are losing their jobs and businesses," he says.

He cites an association survey in which 60 percent of 1,142 responding builders said changes in lending practices at thrifts and commercial banks have affected their plans for 1990.

These are the key findings in regard to thrifts, perhaps better known as savings and loans associations:

- About 49 percent of the respondents said savings institutions are reducing the amount they can borrow in the future for land acquisition, land development or construction.

- Fifty-two percent said thrifts no longer will make land acquisition loans.

- Forty-six percent said thrifts no longer will make land development loans.

- Thirty percent said thrifts no longer will make construction loans.

To some extent, the attitude of savings and loan associations is more understandable than that of commercial banks, because S&Ls are under greater pressure from regulators to maintain sound lending practices.

Some restraints shown by commercial banks are self-imposed, following big losses in speculative ventures. But the builders survey indicates that even sound builders are facing a variety of credit denials.

Thirty percent of respondents, for example, said they've been asked for additional collateral on existing loans and 35 percent said banks now seek excessive documentation. Some, they said, are calling loans before maturity.

All this might not to date have shown up in national statistics so revered by some economists. But as other economists point out, statistics are historical records, not measures of current events.