(FORTUNE Magazine) – -- CARS: Braking. The great consumer pullback has already made itself felt in Detroit. Though light truck sales edged up to five million units in 1987, passenger cars were down 12% from a record 11.4 million. The coming year will be slower yet. Combined sales in 1988 should be about 14 million units, significantly less than the 15 million the automakers expect. And that's not the worst of the story. Imports will continue to claim about 31% of the market, but Americans will be buying more Hondas, Toyotas, and other foreign nameplates built on U.S. soil. Maryann Keller, a vice president at Furman Selz Mager Dietz & Birney, predicts that the combined share of imports and transplants will rise from 32% of the market in 1987 to 42% by 1991. Says she: ''We have never had such explosive growth in production. Two million units of new capacity will be opening in the next two years, just as the market is softening. If you don't offer the right car at the right price, you will be in trouble.'' Ford had the right stuff during the past year, accounting for half of the industry's record profits of $9.7 billion -- up 27% from 1986. That relationship will probably hold in the coming year, though the pie will be a lot smaller. Ann Knight, an analyst at Paine Webber, estimates that industry earnings will drop 29% in 1988 as production falls.

-- APPLIANCES: Cooling. Five years of heady growth is coming to an end. Most analysts expect a 2% to 4% decline in units shipped during 1988, followed by a slight improvement in the first half of 1989. Sad news? Says Martin Sankey, a vice president at First Boston: ''Remember, this industry is coming off five consecutive record years. It is simply settling to more sustainable growth.'' Charles Ryan of Merrill Lynch expects pre-tax earnings in 1988 to be down slightly at worst. And after-tax profits will rise about 15%, he says, mainly because of one-time tax credits. Earnings per share may also be greater because some companies have bought back stock. To help offset rising costs of steel, copper, and other materials, GE is planning to raise some prices 1% to 3% in January. Other companies will likely follow.

-- HOUSING: Remodeling. As with appliances, growth is slipping after five strong years. Starts in 1987 totaled 1.7 million, down 9% from 1986. Starts for 1988 should fall modestly to 1.5 million and hold around that rate going into 1989. Most of the action will be in single-family homes, since the apartment market remains supersaturated. Single-family starts are expected to drop 8% to between 1.1 and 1.2 million units in 1988. As demand softens, prices should rise less rapidly. John Tuccillo, an economist with the National Association of Realtors, expects increases of 6% to 6.5%, about half the rate of 1987. You cannot take the industry's full measure these days without looking at the fast-growing home-improvement business. Fix-up spending totaled more than $100 billion in 1987 and could reach about $120 billion in 1990. Says Barbara Alexander, a managing director at Salomon Brothers: ''In the next two years, spending on remodeling and renovation will almost equal the dollars spent in new residential construction.''

-- CLOTHING: Sagging. What happened to the miniskirt revival that was expected to lift sales? ''There is nothing attractive about looking at knees, particularly in cold weather,'' says Monroe Greenstein, an apparel analyst at Bear Stearns. Nor have consumers been turned on by unexciting fashions shaded in sales-dampening neutral colors. Jay J. Meltzer, an analyst at Goldman Sachs, estimates that wholesale revenues rose less than 8% in 1987, and will grow only 5% in 1988. He expects profits to rise 12%, but that's less than half the 30% gain the industry enjoyed in 1987. Though apparel makers have restructured and gotten out of marginal businesses, they are being squeezed between rising raw material costs and customer resistance to higher prices. ''It is a tough time now,'' says Brenda Gall of Merrill Lynch, ''and it will continue to be tough through the first half of the year.'' The weaker dollar has not kept imports from expanding their market share. Joseph Scheines, an economist at Kurt Salmon Associates, reports that apparel imports in 1987 were up 10% in dollars though only 8% in volume, which the industry measures as ''square-yard equivalents.'' He thinks imports should grow another 10% in dollars in 1988, but only 5% in yardage.

-- AEROSPACE: Pausing. Sales will level off after a somewhat better than anticipated 1987 -- they were up some 10% -- and earnings will cruise along at low altitudes for a year or so. Defense spending will stagnate, with outlays for 1988 and 1989 hovering around $285 billion. Analysts expect the market crash to take an indirect toll because it focused attention on the need to trim federal spending. ''With 7% of the GNP spent on defense, clearly the military will be coming in for more than its fair share of cuts,'' says Alan Benasuli of Drexel Burnham Lambert. Rising demand for commercial planes and new growth in the space program will help orders in 1989. Airlines are bent on modernizing their fleets even if consumers cut back a bit on travel spending. As First Boston analyst Wolfgang H. Demisch puts it, ''They need quieter, more efficient, and larger equipment to ease the problems of noise, long-term fuel costs, and airspace congestion.'' The weak dollar won't necessarily help exports, though. For example, Europe's highflying Airbus Industrie continues to lose money, but with the help of the consortium's government backers, it is grabbing sales. Says Benasuli: ''This is one of the only markets where the dollar has dropped ! 50% and foreigners are gaining share.''

-- COMPUTERS AND ELECTRONICS: More juice. The energy is flowing again after several short-circuited years. True, 1987 sales were up only 3% over 1986, by the estimate of Elizabeth B. Baatz, senior economist at Electronic Business Forecast, an industry newsletter. But Baatz sees a more robust advance of 16% in 1988, slowing to 5% in 1989, as imports slow and exports surge. Earnings should increase 25% for 1987 and 13% in 1988. Personal computers are leading the growth as users replace old machines with more powerful ones. Grant Bushee, executive vice president with InfoCorp, a research firm in Cupertino, California, estimates that PC sales rose 29% in 1987. He thinks they will be up another 21% in 1988 and 18% in 1989. The worst may be over for semiconductor makers. Demand is rising, the weak dollar is slowing the Japanese, and prices are firming. Electronic Business Forecast reports that shipments rose 22% in 1987 and will increase as much again in 1988.

-- TELECOMMUNICATIONS: Static. The best must be yet to come for the Baby Bells, because it has not arrived. Earnings were up just 5% in 1987 and won't grow more than that in the coming year. And a federal court blocked them from entering the long-distance and equipment markets. The companies should eventually win some of their demands. It could take several years, says James McCabe of Nomura Securities, but then the regionals will be able to offer a broad array of services and equipment. Long-distance companies are making better connections. According to Robert Morris at Prudential-Bache Securities, earnings increased 10% in the past year and should grow 12% in 1988. ''Long distance is out of its unhealthy period,'' he says. Equipment manufacturers remain in an overcrowded arena. ''There is a lot of red ink and a lot of downsizing, and inventories are increasing,'' says Maria Sbrilli of Smith Barney. But the five-year-old cellular phone business is way ahead of most forecasts. ''It has gone from no growth to infinite growth,'' says McCabe. By the end of 1987 about one million subscribers had signed up; analysts figure the number will triple by 1990.

-- INDUSTRIAL EQUIPMENT: Slow recovery. More badly beaten than most by the strong dollar, the builders of heavy machinery are finally healing. Sales and profits will increase modestly over the next 18 months, the first significant improvement of the decade. Says Eli Lustgarten, an analyst for Paine Webber: ''The industry is stronger than it has been in several years.'' Thanks go to the Rust Belt revival, which is boosting capital spending. A growing number of foreign companies will be building plants in the U.S. too, and they will buy American to fill at least part of their needs. Among the big gainers: makers of mining and papermaking machinery. Farm and heavy construction equipment builders should enjoy sales increases of 5% to 10%. Machine tool makers will celebrate a rebound from several disastrous years as 1988 sales rise 10% to 15%.

-- PAPER: Still rolling. The industry enjoyed a banner year in 1987. Revenues should top $86 billion, a 15% increase over 1986, and earnings will probably climb 40%. What can paper do for an encore? Answer: Make even more money. Despite slower sales growth, says Mark Rogers, who follows the industry for Prudential-Bache, earnings will increase by 10% in 1988 and ''significantly'' more by the second quarter of 1989 after manufacturers raise prices. Exports were up an estimated 15% in 1987 and should continue growing in the coming year. The fallen dollar will also bolster sales at home. As other U.S. manufacturers grab larger chunks of market share from foreign competitors, they'll be buying more domestic paper products.

-- CHEMICALS: Bubbling. Chemical manufacturers will continue to brew record batches of profits. ''The new year will be a peak one for margins and earnings,'' says Leonard Bogner, an analyst with Prudential-Bache. Sales will rise 10%, he says, and profits should go up some 20%, thanks primarily to demand strong enough to lift prices. High operating rates will also help: Capacity utilization is 84% on average, up some ten percentage points since 1984. The new demand is coming about equally from domestic and foreign buyers. Exports hit a record $26 billion in 1987 and are expected to be up another 10% to 15% in 1988. But chemical makers may begin losing some stamina in 1989. Says William Young, a managing director at Drexel Burnham Lambert: ''The big question is, when does the recession come?'' At best, he thinks, 1989 earnings will be flat.

-- STEEL: Fired up. ''Good news!'' says Father William Hogan, a steel industry expert at Fordham University. ''Most everybody is making money.'' According to Peter Anker, a metals analyst with First Boston, U.S. companies will ship some 75 million tons of steel this year, much more than anyone expected as recently as last summer. He believes shipments will remain just below that level for the next 18 months. Prices have firmed for the first time in years, and earnings will continue to improve, especially toward the latter part of 1988. Steelmakers will use some of that money to boost productivity. Cutbacks among integrated producers will continue, though they won't be nearly as drastic as in the past. Manufacturers are bringing back production of components they had earlier moved abroad, and several foreign automobile producers are building U.S. plants. At the same time, the export market, once written off as dead, is awakening. Peter Marcus of Paine Webber believes American steel exports could climb as high as five million tons in 1988, up from an estimated one million tons in 1987. USX is so excited about the prospects that it recently reopened its export unit, which it had shut down in 1984.

-- OIL: Dashed hopes. A year ago the oil patch was gushing with optimism as harmony among cartel members helped lift crude prices from disastrous lows. Prices hit $20 a barrel during the summer, and most industry watchers thought they would hold. But by late 1987, crude prices had begun slipping from the official $18-a-barrel level as many OPEC members ignored production quotas. The cartel failed to plug the leaks at its December meeting, and prices plunged below $15. Scrutinizing the uncertainty, such analysts as John Lichtblau, president of the Petroleum Industry Research Foundation, now believe prices could fall even lower over the next couple of months. Assuming the members get together this spring, he figures that OPEC crude prices will move back to around $18 a barrel for the rest of 1988, and may climb higher during the first half of 1989. Before that happens, flattish sales and earnings should provoke a new wave of mergers and acquisitions. Weaker independent producers are likely to sell out, and some major companies are vulnerable to takeover, since the October crash pushed many of their stocks well below liquidation values. Refiners won't see much added demand because of the lower prices, but they should be able to fatten their margins, which have been on the lean side lately.

-- AIRLINES: Stronger earnings. It's still a cruelly competitive world up there, but the past year has turned out better than expected, with profits soaring to a record $2.5 billion. Traffic grew 11%, and the industry not only avoided ruinous fare wars but made several increases stick. The coming year should be only a bit less satisfying. Though traffic is apt to increase only 7%, profits should total about $2 billion because fares will rise another 2% or so -- making it the first time the industry has got back-to-back increases in average fares since regulators awarded them. Is price competition dead? Says Timothy Pettee, an analyst at Bear Stearns: ''The oligopoly theory is hogwash. There are still eight major carriers out there. If demand backs off, you will see fare wars that would warm the heart of any free-marketer.'' Meantime the airlines are rediscovering service, laying on such amenities as more legroom and cheerful reservation clerks. One air pocket to watch out for: labor disagreements stirring at several airlines, which could bring fresh misery for travelers during the first part of the year.

-- TRUCKING: On the road back. Earnings and profit margins plunged in 1987, and at midyear analysts foresaw more of the same for 1988 as the deregulated industry battled for share in a stalled market. Instead, profits should gradually return to historic levels. A strong industrial sector will help lift tonnage some 8%, though continuing consolidation will deliver most of that to the major truckers. Fuel costs will also be lower. Most important, freight rates are starting to rise. Truckers got an average rate increase of 3% in the last part of 1987, and ''a good portion of that will go to margins,'' says Tony Robertson of Alex. Brown & Sons, a Baltimore securities firm. The combination of stronger traffic and consolidation should keep rates up in the short term. Robertson thinks earnings for larger companies could be up as much as 20% in the first half of 1988 -- and even more in the second half. The gains will taper off in the first half of 1989, with earnings either flat or down slightly from 1988.

-- BANKING: Still smarting. Shaky loans to less developed countries continue to hang ominously over the industry. The Bank of Boston announced in December it would write off 20% of its exposure to LDCs and establish reserves equal to over half of the remainder. That's more than double the proportion typically set aside by larger banks that followed Citicorp's lead in taking huge write- downs last spring, and it raises fears that more write-downs could be coming. Most analysts forecast lackluster financial performances as banks continue to put their houses back in order. ''Exposure to LDC loans has ripped the guts out of earnings,'' says James McDermott, head of research at Keefe Bruyette & Woods. Thomas Brown of Smith Barney sees operating profits for money center banks growing only 5% over the next 18 months. Earnings at the regionals, which are not as shackled with LDC loans, may climb from 7% to 12%, though many bankers in the energy belt are still reeling from troubled oil and real estate loans.

-- UTILITIES: New competition. Trailing GNP growth, sales will rise only at a 2% rate during the next year and a half. Utilities are still overloaded with excess capacity, and demand remains dim as businesses and consumers alike keep sharp eyes on their energy bills. Earnings per share should rise in tandem with sales next year, says Mark Luftig, who reads the industry's meters for Salomon Brothers. He expects better results in the first half of 1989 as faster economic growth pushes sales up 3% and earnings per share as much as 4%. The marketplace is beginning to supplant public service commissions as an arbiter of some prices. Partly because of new competition, the industry are expected to hold rates steady or even reduce them slightly over the next 18 months. Says Ernest Liu, who follows the industry for Goldman Sachs: ''More non-utility producers, such as companies that generate their own power, are appearing as alternative sources.'' One likely response: Utilities will try to keep large industrial customers from deserting by offering volume discounts to heavy users. Cash flow will remain strong, since hardly anybody is building new plants, and utilities will sink some of the money into such businesses as real estate, banking, and insurance.