THE CHEMICAL ECONOMY By W A L T E R FEDOR, Senior Editor
Watch the consumer Consumer spending got off to a fast start this year as evidenced by a 3% rise in retail trade sales in January compared with December. The seasonally adjusted level reached $27.2 billion, an all-time high. Apparently the strong retail sales pattern continued in February, supported heavily by a surge in automobile sales. There is now good reason to expect retail trade sales to near $335 billion in 1968 compared with $313 billion in 1967-a very healthy 7% increase. This can be supported by the latest consumer expectation and intention survey conducted for the National Industrial Conference Board by National Family Opinion, Inc. The survey shows conclusively that consumer intentions to purchase are running stronger at the start of 1968 than at the start of 1967. As is well known, once the consumer loosens the purse strings, the economy must move forward. The consumer's hesitant spending pattern in 1967 was a strong reason for the business slowdown. Now that the consumer is making retail store cash registers ring merrily, businessmen, and in particular the chemical industry, can continue to develop optimism for the future. The unfortunate point about the relationship between retail trade sales and the chemical industry is that I seldom meet a chemical company executive who pays particular heed to developments at the retail trade level. It is almost as though the main streets throughout the country are nonexistent. This partly reflects the classical view that price, delivery, and specification sell products to customers; it neglects the point that unless the customer has a customer to sell to the buying public, the mechanism will brake quickly. The need to understand the purchasing habits in retail stores has become more critical than ever, and the knowledge can become very valuable planning information. Drugs, cosmetics, toiletries, paints, and detergents are fairly obvious consumer products. At the chemical company level, these accounted for about $14 billion in sales in 1967. But even more important in the future will be the amount of polymers consumed in retail trade items such as home furnishings, appliances, apparel, automobiles, and general merchandise. One mathematical model used by C&EN to forecast chemical industry sales is based upon these items. This model forecasts chemical sales between $51 and $52 billion in 1968. It forecast sales at $47.6 billion in 1967, which will be pretty close to the final figures released by the Securities and Exchange Commission. The model places the heaviest weights upon home furnishings, apparel, and general merchandise sales. It points to appliance sales as being a leading indicator of future chemical sales. This is not so farfetched when you realize, for example, that washing machines required about 1 pound of plastics per unit in 1955; the average was 10 pounds in 1967. Look also at the progress made last year in the use of molded urethane and polystyrene components in furniture. Who doesn't own some clothing made from synthetic fibers? Department store shelves are loaded with products made from or packaged in plastics. Important also is the ultimate buying influence for these products—female household members. Examine the carpets, drapes, upholstery, and furniture in your home. The odds are quite high that your wife made the final choice. Her whims, from ideas in a home to purchase at a retail store, have become a significant barometer for future chemical sales. With this obvious fact at hand, it surprises me that most chemical companies give only passing attention to what takes place at the retail level rather than to couple retail sales to future chemical demand.
The new shape in portable mixers now comes t o you f r o m Eastern The shape of things to come in portable mixers for industry is exemplified today by this new Eastern mixer series. • Much more rugged: Heavy-duty outboard bearing carries radial mixer shaft load . . . single reduction internal gears for greater strength, longer life and quieter operation. • Much more flexibile: Standard Nema Frame Motors . . . selection of direct drive or gear reduction . . . choice of agitator assemblies. • Much more versatile: Special coupling assures positive drive and quick shaft removal • . . adjustable ratchet type swivel clamp for mixer positioning. •
Send for the new Series 500 Bulletin.
EASTERN
INDUSTRIES
- A Division of Laboratory For Electronics, Inc. 100 Skiff Street, Hamden, Connecticut 06514
MARCH 11. 1968 C&EN 23
