For a big part of the chemical indus try, 1961 and the first half of 1962 brought record sales and excellent earnings. But many leaders in the chemical industry are very uncertain about future business. Here, in its annual Facts and Figures issue, C&EN brings together a wealth of statistical and interpretive information from au thorities in Government and industry, as well as from its own staff members. This information gives a detailed pic ture of what the chemical industry did in 1961, and what is expected in the forthcoming months.
SALES-CHEMICAL INDUSTRY Billions of Dollars
1947
1951
1958
Source: U. S. Department of Commerce
1959
1960
1961
1962*
HC&EN estimate based on first half sales of $16,370 million
Ί GENERAL OUTLOOK
C U R R E N T BUSINESS I S GOOD But industry executives are less con fident of the future than they were a year ago MAURICE F. CRASS, JR., Secretary-Treasurer, and MARJORIE V. CAMPBELL, Assistant to the Secretary, Manufacturing
Financial reports of most chemical companies for the first six months of 1962 made pleasant reading in the face of the negative psychology which seems to characterize the general mood of business at this time. In many cases, chemical firms reg istered record sales and most of these showed substantially increased earn ings compared with the first half of 1961. The cautious optimism ex pressed a year ago appears to have been justified—yet the uncertainty with respect to future business seems to have deepened rather than abated. As in past years, we asked the prin cipal chemical manufacturers, during July, to comment on economic condi tions within the industry. With re spect to sales, only 54% anticipated further increases during the second half of 1962; 29% felt that sales would drop; the balance saw no appreciable 2
C&EN
SEPT.
3, 1962
PART
Chemists' Association, Inc., Washington,
change. Opinion with respect to 1963 was more optimistic, with 74% of the respondents believing that sales would increase up to 5% over 1962. As to earnings, it had been generally felt that 1962 would see some im provement, since rising output should boost operating efficiency. For the first six months of the year, a-6 stated, earnings for the most part were en couraging. According to our survey, however, nearly half of the respond ents believe that their earnings will narrow during the last six-month period. As for 1963 compared with 1962, barely 5 1 % indicated that earn ings should show some improvement, with the remainder about equally di vided between a further narrowing and maintenance of the status quo. The wholesale price index for chemicals and allied products averaged 1% less in 1961 than in 2
D.C.
1960, compared with a decline of only 0.5% for all commodities except farm products and foods. Chemical prices showed a slight improvement in January 1962 by rising 0.3% over December. A steady decline then en sued until the average for the first half of 1962 was 1.9% less than for the same period the year before. The June 1962 figure of 97.6 (1957-59 = 100) was 2.4% below the average of the new base index period, and the lowest point since September 1956. According to our respondents, there appears to be nothing of substance in the near future to reverse this dis couraging trend. Nearly half of them felt that prices for chemicals would remain about the same for the rest of the year; 46% felt that the last six months of 1962 would witness further reductions. For 1963 vs. 1962, 60% expect prices to continue downward
while the remainder feel that there will be no real change. With respect to costs involving such items as labor, raw materials, transportation, distribution, etc., about half of the chemical producers expect a rise of from 1 to 5% during the second half of 1962 compared with the first half, the remainder anticipating little if any change. For 1963, 6 3 % of the respondents expect a further rise over 1962 of up to 5 % . Most chemical producers have applied drastic economies in order to protect profits as much as possible. Taking all factors into account, it would appear that some of the austerity programs have reached a stage where further reductions might result in more harm than good.
PRODUCTION INDEXES:
(1957 = 100) 1962a
Expansion
Nearly all respondents (97%) advised that their planned capital expenditures are going ahead on schedule, with only a small percentage being held in abeyance. Ninety-seven per cent reported that their expansion programs have not been completed and that their long-term plans are continuing. Eighty-one per cent advised that the major portion of their 1962 capital expenditures will be for new plant and equipment rather than for improvements in existing equipment. Investment by the chemical industry in new plant and equipment in 1961 totaled $1.7 billion, according to the MCA survey of new chemical construction. In addition, companies associated basicallv with other indusPRODUCTION INDEX
1951
•Preliminary first half data
1960
1959
1951
1947
Combined index
116.3
109
108
105
81
65
Manufacturing, total Durable manufactures, total Primary metals Blast furnaces and steel works Iron and steel Coke Nonferrous metals Clay, glass, and stone products Cement Glass and pottery products Glass containers Structural clay products Lumber and products
116.6 113.0 101.5 100.6& 96.9 80.0'' 114.5'' 108.2 92.5'' 108.5'' 115.2'' 96.0'' 105.3''
109 103 88 85 84 68 105 108 108 104 114 99 105
108 104 90 87 88 75 104 110 106 107 108 104 107
105 102 90 82 86 74 97 110 113 105 104 105 113
82 80 97 94 101 104 76 90 85 86 83 95 102
66 62 81 77 82 97 69 68 67 74 84 76 92
Nondurable manufactures, total Chemicals and products Industrial chemicals Paints Fertilizer Man-made fibers Plastics materials Leather and products Leather Paper and products Pulp and paper Petroleum products Rubber and plastics products Textile mill products Cotton yarns and fabrics Man-made fabrics Wool textiles Food manufactures
121.5 137.8'' 150.3C 100.26 142.6b 136. lh 219.5C 107.4C 90.0124.9& 125.6'' 111.4 129.6^ 119.8'' 117.2b 125.9^ 104.8'' 108.2''
117 128 137 99 119 120 189 101 91 118 117 110 115 111 108 111 98 113
113 121 127 103 115 111 163 100 90 112 112 108 114 109 109 106 96 109
110 114 118 105 112 112 155 106 96 111 111 105 114 113 111 114 105 106
82 69 62 86 82 74 53 86 96 81 83 82 73 98 101 82 130 86
70 45 37 83 64 45 22 94 126 65 65 64 58 88 88 60 148 82
Mining, total Coal, oil, and gas Anthracite Bituminous coal Crude oil and natural gas Metal, stone, and earth minerals
99.8 99.7 70.06 85.3'' 103.1 100.3
98 97 71 80 100 105
97 96 71 84 98 105
95 96 77 83 99 94
87 89 167 109 82 77
76 79 224 129 64 63
a Preliminary first half d a t a . b Preliminary first five m o n t h s only. c Preliminary first four m o n t h s only. Source: Federal Reserve Board
Total Industry
SALES AND INVENTORIES
SALES, monthly average
Chemicals and Allied Products
INVENTORIES, end of year
Industrial chemicals
1958
1961
Chemicals and Allied Products 1957 = 100
1947
Chemical and Selected Industries
1959
1960
1961
Billions of Dollars
1962a
Source·. Federal Reserve Board
1947
1951
1958
1959
1962a
1960
1961
PART
2 C&EN
*Sales, first half 1962; inventories, end of June 1962 Source: U.S. Dept. of Commerce
SEPT.
3f
1962
3
exists, however, that overcapacity will continue to be a problem until the economy shows a higher rate of growth. When this will happen will depend upon many factors, probably the most important being government policy toward business in such areas as profits, wages, foreign trade, and taxes.
tries, such as petroleum, primary metals, automotive, rubber, and pulp and paper, invested an estimated $1.4 billion in chemical construction. The MCA figure compares with an estimate by the Securities and Exchange Commission and the U.S. Department of Commerce of expenditures of $1.62 billion by the chemicals and allied products industry. Expenditures for the first six months of 1962, based on revised data, showed an increase of 6.6% over the same period in 1961, with an estimated 1962 total of $1.65 billion, 1.8% above last year. This figure is 3.5% below the original estimate made earlier in 1962, but is the highest amount expended in any year since the record set in 1957. It is difficult to reconcile the foregoing with the fact that overcapacity continues to be a serious problem, not only for the chemical industry but for most basic industries. Ninety-seven per cent of our respondents admitted this and acknowledged that it has contributed to severe competition and depressed prices in most product lines. Competition has forced cost-cutting and modernization of equipment, and outdated processes and plants have had to be replaced with more modern facilities. Many firms also have considered it necessary to improve competitive situations by balancing and integrating product lines. A feeling
PRICE INDEXES.
Sales and Inventories
Sales of chemicals and allied products during 1961 reached a new peak of S29.8 billion, 7.7% above 1960, as recorded by the U.S. Department of Commerce. The year began with only a small increase over the slight setback experienced by all industry during the latter part of 1960. However, as 1961 progressed, the gain gathered considerable momentum, which took chemical sales in the second half ahead of the first half by 13.6%, after adjustment for seasonal factors. Production of chemicals in 1961 averaged 128 (1957 = 100), according to the Federal Reserve Board's production index, a 5.7% increase over 1960. By comparison, the index for all industrial production rose less than 1% in the same period. Basic inorganic chemicals averaged 115, about 1% above 1960; basic organic chemicals averaged 140, or 8.5% above the previous year. First-quarter 1962 chemical indus-
Assets and Profits
Wholesale Chemicals and Selected Commodities 1957-59 = 100)
Combined index'' Chemicals and allied products Chemicals, industrial Drugs and pharmaceuticals Fats and oils, inedible Fertilizer materials Prepared paint Fuels and related products, and power Coal Electric power Gas fuels Petroleum products, refined Metals and metal products Iron and steel Nonferrous metals Paper Textile products and apparel Rubber and products Lumber and wood products
1962a
1961
1960
1959
1951
1947
100.5 98.0 96.6 97.1 78.5 104.5 103.7
100.3 99.1 98.5 98.3 87.5 104.3 103.6
100.7 100.2 100.5 100.2 81.5 102.2 100.7
100.6 100.0 100.2 99.7 94.1 99.7 100.5
96.7 100.1 97.6 102.3147.5 99.2 85.4
81.2 92.2 80.0 li2.6 c 211.9 88.5 77.2
100.0 96.8 102.9 117.5 97.9 100.4 99.8 100.0 102.8 100.5 93.4 96.2
100.7 97.7 102. ¥ 118.6'' 99.3 100.7 100.7 100.4 102.2 99.7 96.1 95.9
99.6 98.8 101.9'* 116.6'< 97.6 101.3 100.6 103.9 102.0 101.5 99.9 100.4
98.7 99.4 100.8'' 110.9-' 96.5 101.2 101.8 101.8 100.6 100.4 99.7 1C4.1
93.5 87.9 n.a. n.a. 93.8 80.9 72.9 92.8 83.6 116.9 102.1 102.5
79.7 71.4 n.a. n.a. 75.8 60.2 53.1 71.5 65.5 105.7 68.3 77.4
« Preliminary first half data. b All commodities. c Includes cosmetics. d Revised index, January 1958 = 100. n.a.:
Not availabl e.
Source: U.S. Department of Labor
4
C&EN
SEPT.
3, 1962
try sales continued upward, with a total dollar value for the quarter of $8.13 billion, a 17% increase over the same period a year earlier, seasonally adjusted. The second quarter set still a new record of $8.24 billion or 11.6% above the second quarter of 1961, making an increase of 14% for the first six months of 1962 over the first half of 1961. Monthly chemical sales reached a new high of $3 billion in May 1962 (before adjustment for seasonal variation). The FRB chemical production index for the first half of 1962 was 1 1 % higher than in the same period a year earlier. Indications are that this uptrend should carry through 1962 at a rate sufficient to register a new sales record of approximately $33 billion for the year, an increase of 10% over 1961. The value of chemical manufacturers' inventories rose only 2.6% during 1961. In January 1961, the ratio of stocks to monthly sales was 1.8, but by the end of December the ratio was down to 1.5, slightly lower than in recent years. Chemical inventories were valued at $4.36 billion by the end of June 1962, an all-time high, with sales for that month at $2.75 billion. Direct distribution of specific chemical products to retail outlets appears to be on the upswing in the industry. This has many advantages cost-wise as well as in terms of customer service.
PART
2
The chemical industry remained fourth in size in terms of assets among all manufacturing industries in 1961 and the first quarter of 1962, according to Securities and Exchange Commission and Federal Trade Commission data. Total assets in 1961 were 5.7% above those of 1960. By the first quarter of 1962, assets of the industry totaled S26.3 billion, the highest level on record and 4% above the 1961 average. The industry's over-all earnings picture brightened somewhat during the last part of 1961 compared with 1960. Data compiled by the SEC-FTC showed a 2r/c increase for chemicals and allied products manufacturers in 1961 over the previous year, slightly better than that for all manufacturing corporations as a whole. Earnings last year for the basic chemicals segment of the industry fell below the previous year by a fraction of 1%, but drugs rose by 6%. Despite the fact that second-quarter
COST OF LIVING " Index ( 1 9 5 7 - 59 = 100)
WORKERS AND PAYROLL
Production and Related Workers
Chemicals and Allied Products
Payroll
(Thousands of Workers)
1947
1958
1951
1959
1960
«All items ^Preliminary first half data
1961
1962»»
Source: U. S. Dept. of Labor
1947
(Billions of Dollars)
1951
1958
1959
1960
1961
1962 a
^Production and related workers, first half preliminary; payroll, C&EN estimate based on first half payroll of $1477 million Source·. U. S. Dept. of Labor
1961 earnings were the chemical industry's best for the year, reduced demand caused by poor business generally, depressed prices, continued excess capacity, and an increasing flow of low-priced imports, kept profits in the first half of 1961 below the same period of 1960. However, the general pace of business picked up as 1961 progressed and final data for the last half of the year showed earnings to be 12% higher than in the same period a
WHOLESALE PRICES
Index (1957 - 5 9 = 100)
Taxes
year earlier. Net income after taxes averaged 7.3% of sales in 1961, 0.1 percentage point lower than the previous year. Profits in the first quarter of 1962 were 2 3 % higher than the low point in the first quarter of 1961; at the same time, the profit-sales ratio was 10% better. Compared with the closing quarter of 1961, however, both earnings and profit margins were off by about 4% at the start of 1962.
While business, almost without exception, believes that the heavy burden of current taxes on corporations and investors is a major deterrent to increased production and new investment, relatively few chemical or other manufacturers believe that enactment of the investment tax credit embodied in the Administration's 1962 tax proposals would have a significant im-
All commodities
AVERAGE WEEKLY EARNINGS
All Manufacturing
Chemicals and allied products
Production Workers
Chemicals and Allied Products
Industrial Chemicals
Dollars
100
90
80
70 1947
1951
apreliminary first half data.
1958
1959
1960
1960
1961
Source: U. S. Dept. of Labor
1562s
Source: U. S. Dept. of Labor
•Preliminary first half data
SEPT.
1961
3,
1962
PART
2
C&EN
5
pact upon new plant expenditures dur ing the balance of this year or during 1963. The revised depreciation schedules released last July 6 and em bodied in the Treasury Department's Bulletin F have been hailed by certain chemical producers as a source of some relief on a short-term basis, par ticularly in the case of heavy chemi cals. Such relief, however, will be at the price of reduced earnings. Of greater importance, both from the immediate and long-term view point, are the present U.S. tax rates on corporations, which are well above those in most foreign countries and be lieved to be a prime reason for the slowdown in the U.S. growth rate. We asked whether or not chemical manufacturers would consider a cut in the corporate tax rate as favorable to business, in the face of mounting federal deficits and the recent debtrise legislation. Almost two thirds of our respondents answered yes—pro vided tax reduction went hand in hand with a permanent cutback in federal expenditures. An overwhelm ing consensus stated that the federal budget can and should be balanced even with a substantial corporate tax cut. A tax reduction such as that now being considered within the Adminis tration and the Congress would stim ulate business and thus prolong the current rate of industrial activity. It would stimulate a demand for goods and would increase operations in rela tion to capacity, thereby reducing unit costs and providing a stimulus to in creased capital expenditures and growth. This is the generally ac cepted viewpoint as reported in the questionnaire. As stated, however, tax reduction unaccompanied by major cutbacks in government expenditures is regarded as a temporary measure, with only temporary impact on private spending. Business, which thinks in terms of long-range operations, will scarcely be stimulated by a rescind able windfall. To restore confidence, expenditures must be cut, and in meaningful fashion. Our respondents were virtually unanimous in express ing this view.
EMPLOYMENT ALL EMPLOYEES (thousands) 1962a
All manufacturing Durable goods Nondurable goods Chemicals and allied products Industrial chemicals Plastics and synthetics, except glass Drugs Paints, varnishes, and allied products Agricultural chemicals Soap, cleaners, and toilet goods Other chemical products Petroleum refining and related industries Petroleum refining Other petroleum and coal products Paper and allied products Rubber and misc. plastic prod ucts Leather and leather products Stone, clay, and glass products Primary metal industries Instruments and related prod ucts Engineering and scientific instruments Textile mill products Food and kindred products Mining, total Metal mining Quarrying and nonmetallic mining Coal mining Crude petroleum and natural gas
SEPT.
3, 1 9 6 2
PART
1959
1951
16,667.0 9,369.0 7,298.0 809.6 279.2
16,393.0 9,089.0 7,304.0 707.0 n.a.
158.56 108.3b
152.2 106.6
153.2 107.4
149.1 104.5
n.a. 95.2
61.9* 48.7b
62.4 44.7
63.5 44.8
62.3 45.3
n.a. n.a.
%.Sb 85.6*
96.6 82.8
92.2 81.8
89.0 80.2
n.a. n.a.
198.4 165.0*
202.9 170.0
211.7 177.6
215.3 181.4
231.3 198.6
33. 06 596.8
33.0 589.5
34.1 593.3
34.0 584.9
n.a. 511.2
382.7 361.8 560.9 1,203.6
365.0 361.0 566.7 1,141.8
374.0 365.8 595.3 1,228.7
371.4 374.6 601.7 1,181.9
334.4 380.0 587.0 1,364.3
353.4
346.3
354.2
345.2
294.3
72.2'' 883.4 1,707.4 649.2 86.46
74.0 879.6 1,779.9 667.0 87.2
75.7 914.6 1,792.7 709.0 93.3
72.3 942.9 1,790.3 731.0 83.6
40.4 1,237.7 1,823.2 929.0 101.0
107.2b 149.76
114.9 155.6
119.5 182.2
119.6 196.8
102.4 n.a.
303.2b
308.8
313.9
330.9
284.4
factory worker employment in all manufacturing industries dropped 49c. Chemical employment in 1961 was at its lowest point during the first two months, when it fell below the halfmillion mark for the first time since the 1958 recession. Total employees averaged 830,200 in 1961, 400 more than in 1960; employment in all manu facturing industries was off by 2% in the same comparative years. Production worker employment in chemicals gained in both the first and second quarters of 1962, with a total average increase of 2.7% as compared with the first half of 1961. If this trend continues through all of 1962, it will be the highest employment year for the industry since 1957, and 4.6% above the low of 1958. The average weekly wage of the chemicals and allied products produc tion worker rose 3.4% in 1961 over 1960, compared with a 2.6% increase
The number of production workers employed by the chemical industry in 1961 was 0 . 1 % below 1960, accord ing to newly revised data based on the Government's 1957 Standard Indus trial Classification. By comparison, C&EN
1960
16,762.0 9,441.0 7,321.0 829.6 286.8
Note: All data in this table are revised, based orι 1957 Standard Industrial Classification. Not comparable with previous series. « Preliminary first half data. n.a.: Not available on new basis. b Preliminary first five months only. Source: U.S. Department of Labor
Employment
6
1961
16,587.0 16,268.0 9,378.0 9,044.0 7,209.0 7,224.0 846.4 830.2 285. V> 284.9
2
for all manufacturing. The average workweek in the chemical industry was 41.4 hours in 1961 compared with 41.3 a year earlier. The cost of liv ing index of the Bureau of Labor Sta tistics (new base 1957-59 = 100) rose 17c in 1961 over 1960. The first half of 1962 saw a further increase in weekly earnings of chemical workers to 2% over the average for the first half of 1961; all manufacturing wages rose 69c in the same comparative periods. Concurrently, the cost of living index rose another 1%. In 1961, the median wage settle ment was 6 to 7 cents per hour, al most two cents lower than the 8 1 / 2 cent median for 1960. The deferred wage increase median, taking effect in 1961 and subsequent years, was also 6 to 7 cents per hour. The emphasis in contract settlements last year was on wage gains, with only moderate ac tivity in fringe benefits. Health and
PRODUCTION WORKERS (thousands) All manufacturing Durable goods Nondurable goods Chemicals and allied products Industrial chemicals Plastics and synthetics, except glass Drugs Paints, varnishes, and allied products Agricultural chemicals Soap, cleaners, and toilet goods Other chemical products Petroleum refining and related industries Petroleum refining Other petroleum and coal products Paper and allied products Rubber and misc. plastic prod ucts Leather and leather products Stone, clay, and glass products Primary metal industries Instruments and related prod ucts Engineering and scientific instruments Textile mill products Food and kindred products Mining Metal mining Quarrying and nonmetallic mining Coal mining Crude petroleum and natural gas
1962a
1961
1960
1959
1951
12,298.0 6,896.0 6,173.0 519.9 165.86
12,046.0 6,615.0 5,430.0 506.2 164.8
12,562.0 7,021.0 5,541.0 510.8 169.0
12,596.0 7,031.0 5,565.0 505.9 167.5
13,368.0 7,480.0 5,888.0 502.5 n.a.
108.3'' 58.86
102.6 58.2
103.5 58.8
102.2 58.3
n.a. 63.4
35.3& 34.7b
35.5 30.8
36.7 31.0
36.4 31.7
n.a. n.a.
δ
58.5 57.36
58.4 55.8
56.1 55.6
54.7 55.0
n.a. n.a.
128.2 104.8&
130.5 107.1
137.7 113.1
139.8 115.2
172.5 147.8
23.06 473.8
23.5 469.6
24.6 474.0
24.6 470.1
n.a. 435.1
295.8 319.9 449.3 974.9
280.2 318.8 455.1 913.9
288.7 322.9 483.2 992.0
288.7 3S3.4 494.0 953.2
270.5 340.8 507.1 1,175.1
225.2
221.4
232.0
230.1
222.3
38.16 796.1 1,115.3 507.6b 71.36
40.4 793.1 1,190.7 527.0 71.6
42.8 826.7 1,211.3 567.0 76.9
41.4 855.0 1,222.0 589.0 67.2
28.1 1,146.2 1,338.4 840.0 88.9
88.2'' 131.8''
95.4 136.7
99.6 161.2
100.5 175.7
89.1 n.a.
216. Zb
223.1
229.1
245.2
243.3
Note: All data in this table are revised, based orι 1957 Standard Industrial ClassificalLion. comparable with previous series. « Preliminary first half data. n.a.: Not available on new basis. ft Preliminary first five months only. Source: U.S. Department of Labor
welfare plans were the most frequently liberalized fringe benefit during 1961. Vacation leave provisions were im proved in many cases, and the addi tion of an eighth holiday was the most popular improved holiday provision reported. There were 28% fewer chemical workers involved in strikes in 1961 than in 1960, although there were five more work stoppages. Of the total 1,450,000 workers involved in strikes in all industries last year, only 14,100 were in the chemicals and allied prod ucts industry. Only 94 stoppages took place in chemical plants compared with 3367 for all industries. Research The large majority of executives surveyed feel that their firms' research expenditures as per cent of sales will show no appreciable change during
Not
the last half of 1962 compared with the first half. An increase of up to 5% is anticipated during this period, however, by 28% of the respondents. Only 4% feel that their research spending will decrease before 1962 is over. The picture for 1963 compared with 1962 shows a definite uptrend in research expenditures for 49% of the respondents, although 3 1 % see no change from the present. About 20% believe there will be less research spending next year. One question in the survey asked whether during the past two years investment in basic research as a percentage of the total research budget had increased. A majority of the replies indicated that basic research is now taking a larger proportion of the research budget, but it is generally felt that applied re search still gets the major share. Over-all spending for chemical re search and development averaged
about 3 % of sales, or $894 million, in 1961. A survey by the National Sci ence Foundation, published in 1961, estimated that the chemical industry spent $116 million in 1960 for basic research. This represented the largest proportion of company-financed basic research by all U.S. industries that year. Foreign Trade
With the likelihood that most of the important features of the Administra tion's foreign trade bill will be enacted this year, respondents were asked to give their opinions as to its probable effect upon their domestic and over seas operations. On a short-term basis the effects will probably be small, since tariff cuts within the framework of the General Agreement on Tariffs and Trade (GATT) are not likely to take effect prior to 1964. On a longterm basis, opinions differed widely, with producers of organic chemicals and metals anticipating the greatest impact, both on domestic production and on exports. On one point, all were agreed—that administration of the act would be the key to the way it would affect the U.S. chemical in dustry. Complete removal of tariffs, per missible on many chemicals under the 80% clause at the President's discre tion, could have a profound impact on U.S. organic chemicals production, since excess capacity already exists in Europe and Japan and it will take many years for the currently rising overseas production costs to equal ours. The impact would hit hardest on products embodying the highest labor costs. One company was frank in stating that if the President should cut existing tariffs as much as 50%, it would result in the closing of one organic chemicals plant and a divi sional sales volume reduction of more than 50%. Another pointed out that reductions in chemical exports are in evitable because of the improbability that meaningful tariff concessions could be obtained in fields where U.S. exports would be competitive with foreign-made products. A gen eral consensus would indicate that for the long pull intelligent and fair ad ministration of the act will be the most important factor, as stated; plus con tinued expansion of U.S.-owned facili ties overseas in order to remain com petitive abroad and service overseas markets. SEPT.
3, 1 9 6 2
PART
2 C&EN
7
EARNINGS:
Chemical and Other Selected Industries Production Workers Average 1962a
Manufacturing: All manufacturing Durable goods Nondurable goods Chemicals and allied products Industrial chemicals Plastics and synthetics, except glass Plastics and synthetics, except fibers Synthetic fibers Drugs Soap, cleaners, and toilet goods Paints, varnishes, and allied products Agricultural chemicals Other chemical products Food and kindred products Textile mill products Paper and allied products Petroleum refining and related industries Petroleum refining Other petroleum and coal products Rubber and misc. plastic products Leather and leather products Stone, clay, and glass products Primary metal industries Instruments and related products Engineering and scientific instruments Mining: Metal mining Quarrying and nonmetallic mining Coal mining Crude petroleum and natural gas
Hourly Earnirigs 1961 T96Ô1959
Weekly Earnings 1961 1960
1951
1962«
$ 96.06 104.40 85.43 109.25 123.397 109.85''
$ 92.34 100.10 82.92 106.81 122.09 107.74
117.64''
$2.39 2.56 2.16 2.63 2.%b
$2.32 2.49 2.11 2.58 2.90
$2.26 2.43 2.05 2.50 2.82
$2.19 2.36 1.98 2.40 2.72
$1.56 1.65 1.44 1.62 n.a.
2.61*
2.59
2.51
2.41
n.a.
2.76'' 2.38'' 2.39'' 2.48''
2.74 2.36 2.32 2.42
2.64 2.30 2.25 2.34
2.56 2.19 2.15 2.23
1.69 1.58 1.47 n.a.
2.47'' 2.02* 2.496 2.25 1.67 2.39
2.42 1.98 2.45 2.18 1.63 2.34
2.35 1.92 2.35 2.11 1.61 2.26
2.25 1.86 2.28 2.02 1.56 2.18
n.a. n.a. n.a. 1.35 1.32 1.51
3.04 3.176
3.02 3.16
2.89 3.02
2.85 2.99
1.99 2.09
2.46'' 2.44 1.72 2.39 3.00 2.44
2.38 2.39 1.68 2.34 2.90 2.38
2.33 2.33 1.64 2.29 2.81 2.32
2.27 2.28 1.59 2.22 2.77 2.24
n.a. 1.58 1.25 1.54 1.81 1.59
2.79*
2.75
2.68
2.57
1.87
2.83'' 2.34'' 3.12'' 2.59''
2.74 2.28 3.11 2.53
2.66 2.21 3.12 2.46
2.55 2.13 3.08 2.43
1.69 1.46 n.a. n.a.
Note: All data in this table are revised, based on 1957 Standard Industrial Classification. « Preliminary first half data. n.a.: Not available on new basis. ι» Preliminary first five months data.
1959
1951
$ 89.72 97.44 80.36 103.25 117.31 104.17
$ 88.26 96.05 78.61 99.36 113.15 100.50
$63.34 68.48 56.88 66.91 n.a. n.a.
115.90
111.67
109.31
71.83
98.94* 97.54'' 101.17'' 100.82''
96.76 93.96 98.98 98.49
93.84 90.68 94.77 95.65
89.35 87.51 90.54 92.70
62.25 60.42 n.a. n.a.
87.12* 98.63'' 91.15 68.04 101.13 125.90
84.15 101.19 89.16 65.04 99.45 124.42
82.37 97.06 86.30 63.60 95.37 118.78
80.17 94.16 82.82 63.02 93.30 117.42
n.a. n.a. 56.84 51.22 65.08 81.19
130.38'' 101.84''
129.24 102.34
123.22 99.26
121.99 97. bl
84.02 n.a.
100.09 65.12 96.82 121.46 99.34 113.67''
96.32 62.66 95.00 114.55 96.87 112.75
92.97 60.52 92.97 109.59 93.73 110.95
94.16 60.26 91.46 112.19 91.39 107.43
64.31 46.13 63.76 75.30 67.10 85.09
117.64'' 99.68'' 115.38* 108.19*
113.44 99.86 111.34 105.75
111.19 96.58 110.76 103.32
102.77 94.57 109.03 103.52
73.52 65.41 n.a. n.a.
Not comparable with previous series.
Source: U.S. Department of Labor
Controls In last year's article (C&EN, Sept. 4, 1961, page 52) we reported a feel ing among chemical executives that the Government was not sympathetic to business and that this attitude could be reflected in pessimism and cautious planning, with a slowdown in nonsubsidized economic growth inevitable under the circumstances. In reply to our 1962 query "do you agree with certain critics that there has been a loss of confidence in the Kennedy Ad ministration on the part of business generally?," 88rA of the respondents answered in the affirmative. All ac knowledged that the Government's de sire to encourage economic growth was laudable and sincere. Methods em ployed, however, came under heavy attack. Use of the FBI and the De partment of Justice against the steel producers, unwise as the price increase 8
C&EN
SEPT.
3, 1 9 6 2
PART 2
may have been at the time, was pointed to as a completely unethical and un-American use of police powers and an intimidating act against busi ness as a whole. In general, our respondents pointed to increased federal interference in the basic economics of supply and demand and buyer and seller relationships. Much of the Administration's domestic program presented to Congress was not favorable to business. Of special concern is the antibusiness philosophy of many of the President's advisers and the difficulties involved in explain ing commercial realities to officials of the executive branch of the Govern ment. Business has become alarmed over actions of federal agencies in in hibiting growth through discrimination in wage-price guidelines, the apparent increase in the frequency of Federal Trade Commission complaints and rulings, the increasing number of
grand jury investigations, the attitude toward mergers, acquisitions, and joint ventures, and the involvement of the Secretary of Labor in wage negotia tions. Of even greater concern is the Government's disregard of a balanced budget and its failure to recognize the need for adequate profits, both here and abroad, to sustain national growth and create jobs. The foregoing summarizes a rather discouraging point of view with re spect to the outlook for the immediate future. That it is general in the busi ness community has been affirmed by many sources. The situation calls for a responsibility on the part of industry to review its relationships with Government. An improvement in business-government communica tions is sorely needed to transmit in dustry's point of view effectively to the officials in Government who set the policies and make the decisions.
