k • INDUSTRY & BUSINESS
Capital Spending —Turning Point? Fourth quarter estimate of outlays for n e w plant and e q u i p m e n t is highest since 1957 b o o m e r a JL HIRD and fourth q u a r t e r estimates on capital spending by the chemical indus try don't add u p to a boom—or even a boomlet. But there is some indication that t h e downward trend in s p e n d i n g is ended, and that the third q u a r t e r of 1959 marks t h e start of a new upsurge. The chemical industry \vill spend $305 million for n e w plant a n d e q u i p ment in the third q u a r t e r of 1959, ac cording to latest estimates b y Depart ment of Commerce-Securities and Ex c h a n g e Commission. This latest esti mate represents a d o w n w a r d revision from t h e $314 million government fore casters anticipated last June (C&EN, June 15, page 2 2 ) . T h e n e w level p r e d i c t e d just barely holds its own when compared with t h e $304 million t h e industry s p e n t in t h e third quarter of 1958. At that time, the U . S. econ omy w a s struggling to make a come back from a recession, and few indus tries w e r e in a big spending mood. A much brighter picture emerges from fourth q u a r t e r estimates, though.
T h e Government's crystal ball sees spending hitting $381 million. This is higher than for any quarter in 195S— fourth q u a r t e r figure last year was $324 million—and is a level not seen since the boom year of 1957. If the forecasters' fourth q u a r t e r fig ures hold u p , it m a y well b e that the downward spiral in capital spending ended d u r i n g the third q u a r t e r of 1959, and that t h e chemical industry is now at the threshold of another large scale expansion cycle. • 1 9 5 9 Totals Down. F o r the year as a whole, 1959 will not g o into the record books as an outstanding year for spending b y chemicals. Total spending b y the chemical industry this year is pegged a t $1.25 billion—capital outlays in 1958 totaled $1.32 billionHelping to hold d o w n die 1959 totals is a dismal showing in the first quarter, when only $260 million was spent. This is the first quarter to dip u n d e r $300 million since the first q u a r t e r of 1956.
Results for t h e second «quarter of this year aren't m u c h better a t S302 mil lion. This level is 6"^ below the S324 million estimated in June, and some 10^r u n d e r the S33T million orig inally forecast ί&τ the second ausiter by government experts last N l a r d i . • Business P o s t s G a i n s . By c o n t r a s t the nondurable goods industries c a t e gory a s a whole is expected t o p o s t an 8 ^ gain over 195S. Within this c a t e gory, only the chemicals a n d allied products g r o u p is expected to show 1959 spending totals lower than those reached in 195SS p e n d i n g for new plant a n d ecpaipment b y all U. S- business is expected ta reach S33-25 billion this year. Tels is about 9*"< higher than outlays for 1958, hut falls a b o u t l O ^ shy of t h e record levels t o u c h e d in 1957. F o r all manufacturing, primary iron a n d steel and primary nonferrous metals a r e the only groups other than chemicals ex p e c t e d to s p e n d less this year t h a n in 195S.
Chemical Industry Poised for New Round of Expansions NEW PLANT AND EQUIPMENT, Millions of Dollars
2ndqtr. 3rd qtr. 4th qtr.! 1st qtr. 2nd qtr. 3rd qtr. 4tfi qtr 1957 1956
Ι fL ϋι ψ.
2nd qtr. 3rd ψ. 1958
1SSS SEPT.
2 1,
1959
C&EN
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