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 CLEVELAND, Aug. 9 /PRNewswire/ -- The ongoing flooding in parts of the Midwest will actually be a boon to most segments of the region's economy, predicts the head of an investment management and advisory firm that is respected as one of the top Midwest research resources for institutional investors.
 Scott D. Roulston, president of Cleveland-based Roulston & Company, said that even agriculture and related industries such as farm equipment and fertilizer, which will be hurt in the near term, will likely enjoy greater demand and higher prices by next year. Demand will also increase in industries that provide construction equipment and supplies for rebuilding the area's infrastructure, such as concrete, aggregates, and structural and reinforcing steel.
 "In terms of consumer demand," added Roulston, "one only has to see the pictures on the national evening news to conjure up all of the specific areas of demand that are now being impacted negatively and will be impacted positively once the water fully recedes.
 "The need to rebuild, remodel, and reequip existing residential housing will have a positive impact on the demand for all types of building materials, paint, carpet and wall covering, appliances and other housing necessities once individuals can return to their homes."
 Also standing to benefit are businesses involved in the maintenance and repair of electrical and mechanical equipment such as cars, production equipment, garden tractors, and heating and air conditioning systems.
 Said Roulston, "Demand for bearings, bushings, electrical switches, hydraulic components, wiring, pumps, electric motors, and any number of an endless list of components that make things work will increase significantly once the water recedes and individuals and businesses can get about getting back in operation. Companies that manufacture such replacement parts and those who specialize in distributing them will undoubtedly benefit."
 Roulston said the biggest negative impact has been on the railroad industry, which is losing business on right-of-ways that have been inundated by the floods.
 "What will follow are the very large capital expenditures that will be necessary following the receding of the water to repair and replace road beds that undoubtedly have been significantly damaged or totally destroyed by the floods," he said. "This expense will total tens if not hundreds of millions of dollars for those railroads that operate along the Mississippi and other rivers that have flooded."
 Roulston added that while some trucking companies are picking up additional tonnage, they are incurring greater operating expenses because they have to avoid flooded areas and washed out roads and bridges, thus reducing profitability.
 Norman F. Klopp, portfolio manager of the Roulston Midwest Growth Fund, said the impact of the flooding should be kept in the proper perspective. He noted that the extended time span, when compared with other similar natural disasters such as hurricanes or tornadoes, has magnified the impression of the floods' economic impact.
 "While we do not mean in any way to diminish the massive public and personal impact that the floods have had on those who have lived in their path, the fact that the event has been a major news item night after night for more than a month significantly increases the emotional impact relative to the real economic impact on an overall basis," Klopp said.
 "Relative to the normal width of even the mighty Mississippi, the path cut by the floods has been huge. Relative, however, to the total productive area of the economy, the path has been quite small."
 Roulston & Company, founded in 1963, is a professional investment management firm and registered investment adviser. It provides advisory services to more than 500 accounts including pension plans, corporations, 401(k) plans, profit-sharing plans, individual investors, trusts, and estates. The firm recently introduced a family of mutual funds that includes the Roulston Midwest Growth Fund.
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 /CONTACT: Fred Buchstein, vice president of Dix & Eaton, 216-241-0405, for Roulston & Company, Inc.; or Scott D. Roulston, president, or Brian A. Zinser, marketing manager, of Roulston & Company, Inc., 216-431-3000/

CO: Roulston & Company, Inc. ST: Ohio IN: FIN SU: ECO

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Publication:PR Newswire
Date:Aug 9, 1993

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