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Rh and conversely, when income is falling, for construction to produce a smaller part of the reduced income.

For these tendencies there are readily understandable causes. Construction activity makes its own demands for the production of a variety of materials, and both directly and indirectly increases employment, with consequent increase in the income of workers. Moreover, the normally substantial part of total construction activity that is made up of the private construction of industrial, commercial, social, recreational and public utility facilities is a barometer that indicates by its rise and fall the state of the economic weather, present and to come. Made up of uncoordinated aggregations of individual enterprise and highly responsive to change in the cost of funds used for its financing, private construction activity by its increase is indicative of an expanding economy; by its decrease, it indicates a recession of private enterprise, and by its own lessened demand for the production of materials and for workers, it hastens the economic decline which follows.

In the light of this discussion of the influence of private construction upon the national income, it is of interest to observe in table 22 the relations of the dollar volume of private and public construction, maintenance, and work relief to the national income in the several 4-year periods from 1915 to 1942.

In the three 4-year periods from 1915 to 1926, inclusive, the volume of private construction rose steadily from 8.6 percent of the national income in the first period to 14.2 percent in the third period. In these 12 years the national income increased nearly 128 percent from 32.3 billion dollars in 1915 to 73.6 billion dollars in 1926. For 3 of the next 4 years it increased slightly to a maximum of 79.6 billion dollars in 1929, and in 1930, the fourth year, dropped sharply to 72.5 billion dollars. This was the beginning of the depression.

In the 4 years 1927 to 1930, inclusive, the volume of all private construction averaged 13.2 percent of the national income—less than the average of 14.2 percent for the preceding 4-year period. The reduced average for the 4-year period, in itself an index of impending depression, was the result of a decline in each of the years, markedly sharpened in 1930, as follows: For 3 of the next 4 years, during which the period percentage reached a low value, the annual percentages continued to decline, at first sharply, then more slowly to a low point in 1933, which was only slightly exceeded in 1934, as follows:

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