BUSINESS
PROCESS INDUSTRIES' OUTLOOK D a n g e r in r e g a r d i n g President-eiecî as miracle m a n seen b y b a n k e r . . . Possible overexpansion of rraanufacturing facilities . . . Yet optimisim prevails Α τ THE start of a new year it is natural -*•*• to put on one's thinking cap and en deavor to analyze the prospects for the year. Most public utterances by economists have been more optimistic than otherwise. An investment banker many years on Wall Street, in private conversation, ex pressed the fear that the American people are expecting the new President-elect to be a miracle man. They hope to see immediate results and improvement, particularly in reducing taxes, effecting drastic economies in gov ernment expenditures, reduction in dupli cation of effort among government agen cies, and attainment of complete harmony a m o n g conflicting factions. It is the opinion of this banker that it will require ten years to recover com pletely from hostility to "big business" and other unwise acts and attitudes that he says have prevailed for 20 years. In an other four years another Piesidential elec tion takes place—will the American peo ple have become impatient with progress made up to that time? Will at that time the opposing party again be placed in power?
crease in basic commodity p r i c e s , pros pects that the steel industry will n o t oper ate at capacity indefinitely, the l o w e r level of corporate profits, a peak for p l a n t and equipment spending, declining exports, high inventories in manufacturing, a n d the retail sales situation. Backman predicted that a 109c? reces-
sion will start during this year a n d go on through 1954. O. Glenn Saxon, Yale Uni versity, envisions a 10% decline in the basic wholesale commodity index during the year and a decline of 5 to 1 0 % in the consumer price index. Production of industrial chemicals is setting new records, as will b e surmised by t h e accompanying top graph. The re vised index figure for September was 565, but there is n o holding of production down, the October index having been 574 com pared with 5 5 6 in October last year. For all industrial production there was no change in October, or 231 as against the revised same 231 for September, com paring with 222 in October 1951. In the case of both lines, t h e final figures for October are in harmony with many re-
~ IHDUSïRIAnd^
V ^ ^ ^ n ^ . ^-^ •
BASE PERIOD î N D E X Î 9 3 5 — 1 9 3 9 - 1 G O ««MISTRIAL CHEMICMS ^ f " "~
s w
*
l\
-
*
>
'
*
$
* \ , ^ ^ ^ ^*Sg?*** t>^3 ^TOTAL'lMDuSTRIArPRODUaBH" ^ . %* ,
,
-
,
Ί350-
Is Steel Overexpanded? Another thought—and possible c l o u d has crept into thinking here at the turn of the year. Has our industry overex panded in the great struggle to maintain and improve our standard of living while arming for defense? T h e steel industry faces "highly com petitive times" says Ben Moreell, chair man, Jones & Laughlin Steel Corp., since the industry has increased its capacity to over 116 million ingot tons a year from 95 million tons in August 1945. "It is incon ceivable that the industry will operate at maximum capacity into the indefinite fu ture," Moreell concludes. Moreover, there are many industries among the chemical processing industries which may well ask the same question. Of course, most idealists and many practical persons will answer that as long as so much of our world exists substandard as regards necessities and luxuries, there is no need for any American industry to work at a limited pace. At a forum of the National Industrial Conference Board, Jules Backman, NewYork University, listed as favorable factors for 1953 the final increase in armament spending, a continuation of high-level in comes, the end of consumer credit and housing controls, the large backlog of orders in the durable goods industries, and the conservative buying policies of busi ness and consumers. On the negative side he listed the de
102
CIGARETTE CONSUMPTION
1
USE OF TAX FREE AND TAX PAID, IN
BfUlONS
1
*f*J
1
1 I
0
V
FACTORY SALES PASSENGER CARS COACHES AND TRUCKS THOUSANDS O F UNITS
I
A /\lt\ \v -ν^\ ks-S* II
\ f
MOTOR VEHICLES
II
~*^V
i^B?
1 1 1 1 1 1 1 1 1 1 1 1 «951
1952
ELECTRIC POWER
NEW CONSTRUITE
INDUSTRIAL A N D UTILITY PRODUCTION, BILLIONS OF KW..HR.
ALL TYPES. BILLIONS OF DOLLARS
&$Λ
lite
CHEMICAL
AND
ENGINEERING
NEWS
ports of increased output that were cur rent that month. Another group that carries a n index figure is chemical products, where the October index was 308 versus 304 in September, alongside 303 in October last year. Nondurable goods, as a class, slipped back from 200 to 198, September to Oc tober, with 193 prevailing for October 1951. Textile products slipped from 176 to 172 (154 the year before), while rubber products also declined from 2 4 9 to 246, against 239 the year before. On the downside were rayon deliveries, from 377 to 362, but a marked improve ment over 2 9 3 last year. Cotton consump tion declined from 145 to 142, a s against 140 in October 1951. For durable manufactures as a class, a decided rise took place, 289 to 296, due to recovery from the steel strike. Iron and steel b y itself improved from 2 6 7 in September to 276 in October. Turning to the graph on factory sales of motor vehicles, let it b e observed that seldom does a figure double itself in a month in this series of graphs. However, this happened in vehicle sales, trie August sales having been 270,982 units, rising to 551,159 in September, and still further to 604,261 in October, or more than in Oc tober 1951, at 526,448 passenger cars and trucks. Sales for those months were outstripping production which has been slowing down because of changing over to n e w models. Consumption of cigarettes bas been holding steady for three montris, August having been 40.3 billion, September, a shorter month, 39.3 billion, a n d October 41.8 billion, comparing with 4Q.9 billion for t h e like 1951 month. Cigarette consumption in October con sisted of 37.3 billion tax-paid, and 4.5 billion tax-free. Theoretically, such con sumption increases regularly, as the popu lation gains. New Construction Is Very Seasonal The roller coaster graph pertains to new construction which is seasonal since winter months are not so convenient. September seems to have been the 1952 peak, at $3.1 billion. The car on the coaster is starting its descent, with occu pants holding onto their hats, s o to speak. October amounted to $3.0 billion and November, $2.8 billion. Watch for a steep descent! A year ago, November, was $2.8 billion also. Production of electric power reached a new all-time top in October, a t 40.5 bil lion kw.-hr., comparing with 37.8 billion for the corresponding 1951 year. In Sep tember output was 38.8 billion kw.-hr. Production would have been even greater except for drought in the Far West, which curtailed hydroelectric production. CHART CREDITS: Industrial and Chemi cal Production—Federal Reserve Board; Cigarette Consumption—Bureau of Internal Revenue; Motor Vehicles—Department of Commerce; New Construction—Depart ment of Commerce; Electric Power—Fed eral Power Commission. V O L U M E
31,
NO.
1
DOW
Tall Tale
CORNING
SILICONE
NEWS
NEW FRONTIER. EDITION S E R I E S
Armed only ici t h α Bible and protected frotn the elements by a hot tie worn, upside down, Johnny Appleseed wandered unharmed among the dispossessed Indi· ans, planting apjpleseeds in the wilderness. He made it his mission to bring apple sauce and apple butter, apple pie and apple cider; to bring health and happiness, as he knew them, to pioneer families from the Monongahela to the River Platte. A frail* homespun saint among American giants, Johnny Appleseed may outlive them all.
to Fabulous Fact Much more comfortable than t h e kettle J o h n n y Appleseed wore a s a n u m b r e l l a , is o u r S i l i c o n e w a t e r r e p e l l e n t f o r s y n t a c t i c fabrics. W e call it D e C e t e x 104·. Our c u s t o m e r s give i b e treated f a b r i c a n a m e o f their o w n . T h e i m p o r t a n t p o i n t is t h a t n o w , for t h e first t i m e s i n c e p e o p l e s t a r t e d to wear c l o t h e s , y o u c a n buy suits t h a t w i l l n o t be wet by the rain e v e n after repeated dry cleaning or laundering. You c a n look p r e s e n t a b l e e v e n t h o u g h y o u d o get c a u g h t in at s u d d e n s h o w e r . C h i l d r e n a r e no l o n g e r a m e n a c e at meal t i m e because m o s t foods a n d d r i n k s c a n be >viped a w a y w i t h o u t leaving a spot. That's a n o t h e r fabulous fact made possible by a Dow Corning Silicone product. Thanks to t h e s e m o s t d u r a b l e of a l l w a t e r r e p e l l e n t materials, you t o o m a y soon be wearing y o u r umbrella. Send today for your Reference Guide to the Dow Corning Sîlitones that make the "impossible" practical. Address Dept. ΒΛΛ-1.
DOW
CORNING M IDLAND,
OOf CfiSNiNG
^sitieMES"
CORPORATION MICHIGAN
ATLANTA «CHICAGO «CLEVELAND «DALLAS «LOS ANGELES « NEW YORK· WASHINGTON, D. C. TORONTO: Fiberglas Canada Ltd. LONDON: Midland Silicones Ltd. PARIS: St. Go-bain, Chauny et Cirey. IF YOU WEAR GLASSES iry Sigh* Savers and see how we!! silicones clean, polish and protect eyeglasses. SIGHT SAVERS are the new, popular Dow S1CHT . S A VSRSJ
J A N U A R Y
Corning Silicone treated tissues that KEEP YOUR GLASSES CLEANER. 10c ai all drug and tobacco
5,
1953
counters»
1Π5
