LAS VEGAS -- After their worst year since 1946, home builders can look forward to better times in 1992, a panel of economists said yesterday.
But the turnaround will not likely start until this spring or summer and improvement will be slow, builders at the National Association of Homebuilders annual convention were told.
"Home building will be decidedly better than 1991," Norman Robertson, chief economist for Mellon Bank in Pittsburgh, said at the convention, which ends Monday.
Mr. Robertson said he expects housing starts to jump by 15 percent to 20 percent this year.
Last year, builders started 1.015 million housing units nationwide. David F. Seiders, chief economist for the builders association, predicted 1.2 million starts this year and 1.4 million starts in 1993.
By 1994, housing should be fully recovered with 1.6 million units launched, Mr. Seiders said.
David M. Jones, chief economist for Aubrey G. Lanston & Co., a Wall Street bond brokerage, said the economy is stagnating because of the excesses of the 1980s, including overdevelopment of commercial real estate and enormous growth in debt.
Slowing the recovery's speed is a troubled banking system that has made it difficult for some individuals and businesses to obtain loans, Mr. Jones said, but that problem seems to be easing, he said.
Consumer confidence should return as business restructuring stabilizes and the unemployment rate starts declining, Mr. Jones said.
A key reason for shaky consumer confidence has been the layoffs and firings of white collar workers, including many middle-management jobs, he said. "This is a sector of employment that had never been hurt like this before. The impact has been enormous."
Laurence H. Meyer, president of Laurence Meyer & Associates, a St. Louis forecasting company, said that while the economy will start recovering this year, the long-term problem of slow growth must still be attacked.
That can be done only by encouraging business investment, he said.
While Congress and the Bush administration look for ways to stimulate the economy, investors and business leaders fear an overreaction or a wrong approach, Mr. Meyer said.
Mr. Jones warned that "a reckless response [by Congress or the administration] that adds to a bloated budget deficit will stifle any recovery."