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Volume growth cannot be expected to outpace population growth in the US for the household products industry as the industry has matured. However, there is room for international growth for the industry, even with dislocations. Efficiency, acquisitions, and product innovation are the main issues in the industry during the 1990s. Investors need to evaluate these stocks on an individual basis before selection.

Retailers of home furnishings and furniture are not expected to feel the effects of the Asian financial crisis, as moderate interest rates in will likely spur growth in the US home and furniture markets. In addition, sales in the office furniture market will complement increased spending for home furnishings. Most of these stocks are timely for investors in 1998, but may be less so for the next three to five years.

Housing starts are expected to fall by 2% in 1998 from there 1997 levels, even though there was a seasonally adjusted increase in Feb 1998 and the California housing market is healthy. Home builders are also expected to achieve critical mass in 1998 from acquisitions and mergers, thus making them more attractive to investors. Earnings prospects for these companies are good for 1998 and these stocks are likely to increase in price.

Shipments in the building materials industry are expected to remain even in 1998 with larger average home sizes along with increased remodeling and repair, despite a 2% decrease in home unit sales. However, industry profits from the good domestic economy have led to an overexpansion in production capacity. Investors need to be selective when evaluating these shares for future earnings.

The planned mergers of several leaders in major environmental industry segments, such as landfill and waste hauling operations, in 1998 is the main trend that investors need to be aware of when making selections. Earnings for some companies may be lackluster in the near future, but should also be increasing for others due to water-treatment services demand. Conservative and speculative investors may both be interested in this industry.

Firm fundamentals and strong demand by consumers has continued to benefit the trucking and transport leasing industry in 1997 and 1998, and both the truckload and less-than-truckload sectors should continue to profit. The Teamsters National Master Freight Agreement has also been re-negotiated earlier than had been anticipated, and a strike is not likely. These stocks are timely in early 1998, and several are of interest to investors.

Specialty retailers, which comprise a diversity of firms, had a generally good Christmas selling season in 1997, even though prospects and results were mixed for several companies. However, high employment, low inflation and interest rates, and other signals for the US economy are positive for the industry as a whole. Investors need to be selective when choosing these stocks, both for the short term and the next three to five years.

Lack of sales and other factors have led some apparel companies to forecast lower earnings for the 4th qtr of 1997, and profits will be impacted by the retail chain store industry. Brand and fashion names have become important to the clothing industry in the 1990s, and apparel spending based on this trend has been growing. Investors need to be cautions when making selections in this industry, although it is timely for the late 1990s.

Most department store chains in the US had lower same-store sales than what was expected for the 4th qtr of fiscal 1997, with lower women's clothing sales as one of the primary factors. However, discount store chains, such as Family Dollar Stores Inc and Dollar General Corp, expanded their relative shares of the market. Investors need to consider individual stocks as this industry does not have attractive potential through the years 2000-2002.

Mexico has replaced China as the apparel supplier to the US since passage of the North American Free Trade Agreement in 1996, and the textile industry in the US is expected to benefit from this. The merger and acquisition trend is expected to continue and help the industry's overcapacity problem, and lower cotton prices will help denim margins. Investors need to focus on timely stocks which have sound international operations.

The investment prospects of the environmental industry are mixed. The waste management segment stocks do not have much appreciation potential before 2003. Water treatment services are expected to have their earnings increase by 2% to 4% annually until 2002. Timely stocks in the environmental sector include companies with leadership positions in technology.

The industrial services industry features staffing and outsourcing companies, janitorial services companies, laundry services companies, information services companies and corrections services companies. The timeliness, capital structure and financial information for each company are provided.

Strong customer demand, healthy economic conditions and a stable rate were beneficial for the economic conditions of the trucking and transport leasing industry during 1997. The stocks of the industry performed well during 1997 and could continue to do well through 2002. There are risks involved in these investments but they might pay off during early 1998.

Pricing and demand for apparel has improved in 1997, but sales for the 1997 holiday selling season and after are an unknown factor in spite of a good US economy. Stable material costs, better cost structures in apparel companies, and improved European economic conditions through 1999 are likely to support earnings growth in the industry. Investors need to be cautious with their stock evaluations, although the industry is ranked for timeliness in 1997.

The outlook for the 1997 holiday shopping season is good compared to 1996 with higher consumer confidence due to a higher minimum wage, continued personal income growth and low unemployment. The selling environment for books, video games, toys, consumer electronics and soft lines is also good in 1997 and this should continue through 1998. Investors must select stocks in this industry that are timely for both the near- and long-term.

The outlook for apparel textiles is fair after a good year in 1997 for both the man-made and natural fiber segments of the textile industry, due to more stable material prices and better inventories. Home furnishing textiles are also expected to outperform apparel textiles in 1998, and Mexico, which uses US textiles, has become the leading US apparel supplier. Investors must be selective in buying these stocks, as the industry has become less timely.

Future prospects for the retail store industry are mixed, especially for department stores where women's apparel sales have been weak in 1997. The outlook for discount stores is better, however, as they continue to gain a greater share of the market. Retail stocks have outperformed the market in 1996 and 1997 after a weak 1994 and 1995. Investors must consider individual stocks, as the industry is unattractive for the next three to five years.

The building materials industry offers solid long-term prospects for investors, but some companies are experiencing lumber and insulation shortages. Although housing starts declined 4.8% in 1997 compared to the previous year, commercial building is expected to increase. Home centers and lumberyards will probably gain revenues from sales to homeowners who are remodeling or making repairs.

The homebuilding industry is expected to make gains in 1998, although changes in interest rates may influence consumers' decisions about building. After trading lower than average for the first half of 1997, homebuilding stocks are rising. Shares of Centex, for instance, gained about 35% in the third quarter. Many builders are spinning off their financial services subsidiaries.

The less-than-truckload (LTL) segment of the trucking industry has been robust during 1996 and 1997, and rates have increased and stabilized, as well. Package volume for some LTL carriers increased during the Teamsters strike against United Parcel Service, in addition. However, the upcoming National Master Freight Agreement renegotiation is a concern. These stocks, some of which have potential, must be considered on an individual basis.

Financial results for special lines retail stores are as mixed as the numerous types of stores that make up the industry and although sales were good in February and March, 1997, they slowed considerable in April. Many sectors, even those doing well, are not likely to show much improvement and will have slow growth rates. Investors should seek companies with high growth potential or those that cater to price-conscious consumers.

Companies in the machinery industry are expected to meet projected market performance projections in 1998, and domestic sales in 1997 are expected to be solid. Modest top-line growth is expected in the US beyond 1997, while European markets are making a slower recovery. Consolidation in the machinery industry has become more commonplace, which has escalated share prices. Investors should consider purchasing equity in well-diversified organizations with solid finances and good earnings records.

The structure of the natural gas distribution industry has changed from the mid-1980s to the late-1990s. Pipelines have become common carriers from whom all customers may buy directly, instead of traditional gas-supply dealers, under new rules from the Federal Energy Regulatory Commission. Prices and profits are no longer regulated, and marketing ventures may now cross state lines. High-quality, defensive stocks are the industry's best investments.

The Canadian energy industry was prosperous in Jan 1997 and Feb 1997 with higher prices for oil and high spot prices for natural gas, and earnings and cash flows were good for the 1st qtr of 1997. However, prices have fallen with milder weather and weakened demand. Industry economic conditions are favorable for the rest of 1997, but pipe line rates have been lowered. The best investments in this industry appear to be integrated oil producers.

Investment in gas transmission industry stocks is still something of an enigma as deregulation, the rise of many new local distribution companies, mergers and acquisitions by large gas utilities, limited profits, and the replacement of long-term interstate contracts with utilities by 2-3 year local contracts create questions. Conservative investors should retain stocks in some of the better gas transmission companies, especially those involved in mergers, as they will have steady, if not spectacular, earnings and little price volatility.

The industrial services industry will report solid profit growth for 1996, but its Timliness rank has dropped since June. Since September, investors have in large part ignored the industry, but some companies offer above-average price performance prospects for the 6- to 12-month time frame. Most personnel-placement stocks have good appreciation potential for the three- to five-year time frame.

Modest gains are expected for the textile industry during the 4th qtr of 1996 after mixed results during the 3rd qtr of the year. Knit goods is one industry segment which is creating excitement through several new looks and products in 1996. However, denim mills are not doing well in 1996, but this is expected to change in the second half of 1997. Although earnings should improve in 1997, investors must evaluate these stocks individually.

Paper and forest products industry economic conditions have been extremely volatile in 1996 and analysts are predicting that they will continue to remain so in 1997 except for a few companies who will offer some comparatively high yields on their securities. Despite a boom in the construction industry, lumber prices have dropped approximately 15% since September, 1996. In the paper industry, only Mosinee Paper Corp. is expected to show a satisfactory performance for 1996.

Home construction industry securities will be an average investment area for 1997 and beyond but sharp short-term fluctuations can be expected in keeping with the country's economic trends. Performance in 1996 was strong, aided by the Federal Reserve's decision not to increase short-term rates and its sending home mortgage rates under 8%. Employment, and its resultant effect on home purchases, will greatly influence industrial growth.

Focuses on the 1998 business prospects of General Nutrition Cos. Inc., a retailer of vitamins, minerals, supplements and other health products. Capital structure; Current position; Financial strength; Stock's price stability; Price growth persistence; Earnings predictability; Investment advice; Annual rates.

Focuses on the 1998 business prospects of Sotheby's Holdings Inc., a leading fine-art auctioneer that specializes in paintings, jewelry, decorative art, and other collectibles. Capital structure; Current position; Financial strength; Stock's price stability; Price growth persistence; Annual rates; Earnings predictability; Investment advice.

Focuses on the 1998 business prospects of Hancock Fabrics Inc., retailer and wholesaler of fabrics, crafts, and home sewing accessories. Capital structure; Current position; Financial strength; Stock's price stability; Price growth persistence; Earnings predictability; Investment advice; Annual rates.

Focuses on the 1998 business prospects for Saks Holdings Inc., parent company of Saks & Co. and a premier fashion retailer. Capital structure; Current position; Financial strength; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice; Annual rates.

Focuses on the 1998 business outlook for Consolidated Stores Corp., a closeout, value-oriented retailer operating stores in the United States and Puerto Rico. Capital structure; Current position; Financial strength; Annual rates; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice.

Focuses on the 1998 business outlook for WestPoint Stevens Inc., a leader in the United States home fashion fabrics and knitted fabrics markets. Capital structure; Current position; Financial strength; Annual rates; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice.

Focuses on the 1998 business outlook for Pillowtex Corp., a designer of bed pillows, blankets, mattress pads, and down comforters, and provider of other complementary bedroom textile furnishings. Capital structure; Current position; Financial strength; Annual rates; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice.

Focuses on the 1998 business outlook for Galey & Lord Inc., a maker and marketer of woven cotton and cotton-blended apparel fabrics. Capital structure; Current position; Financial strength; Annual rates; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice.

Focuses on the 1998 business outlook for Dixie Group Inc., a manufacturer of specialty yarns, knit fabrics, carpet and rug yarns for use by makers of apparel, home furnishing, and industrial and transportation products. Capital structure; Current position; Financial strength; Annual rates; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice.

Focuses on the 1998 business outlook for Culp Inc., a leading manufacturer and marketer of fabrics for the furniture, bedding, and institutional-furnishings industries. Capital structure; Current position; Financial strength; Annual rates; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice.

Focuses on the 1998 business outlook for Russell Corp., a designer, manufacturer, and marketer of leisure apparel, athletic uniforms, and lightweight woven fabrics. Capital structure; Current position; Financial strength; Annual rates; Quarterly sales; Stock's price stability; Price growth persistence; Investment advice.