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MARCH 1959 


| CURRENT 
BUSINESS 























SURVEY OF CURRENT 


Aye — S56 
aa ps. 


A 
i> 


2 lel 


BUSINESS 





PA 
on fen Es 
THE BUSINESS SITUATION 


Introduction...... 


MARCH 1959 


eeeneeee 


Payments Excess in International Trade Continues High. 


Exports Remain Low 


SPECIAL ARTICLES 


Busines 
[a icturing Programs.. 
ranufacturing Industries 
ition of 1958 Programs 
les Anticipations.. 
Consun 


Consumption Patterns. 


mption-Income Relations 


MONTHLY BUSINESS STATISTICS... 


Statistical Index 


Purchasing and Income Patterns. 


inticipations of 1959 Investment and Sales.... 


. 5-1 to S—40 
..+++imside back cover 





Published moni 
Secretary ‘; e of fusiness Eeonomi ¢ M ‘ 


by the U.S. Department of Commerce, Lewts L. Strauss, 
Josern MEEHAN, 


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U.S. DEPARTMENT OF COMMERCE 
FIELD SERVIC! 


Albuquerque, N. Mex. 
321 Post Office Bldg. 
Tel. 7-O311 


Atlanta 3, Ga. 
66 Lackie St. NW. 
J Ackson 2-4121 


Boston 9, Mass. 
U. 8, Post Office and 
Courthouse Bidz. 


Liberty 2-5600 


Baffalo 3, N.Y. 
117 Ellicott St. 
M Adison 4216 


Charleston 4, 8.C. 

Area 2, 

Sergeant Jasper Bldg. 
Tel. 2-7771 


Cheyenne, Wyo. 
207 Majestic Bidg. 
Tel. 8-8931 


Chicago 6, Til, 
226 W. Jackson Bird. 
ANdover 3-3600 


Cincinnati 2, Ohio 
36 E. 4th St. 
DUnbar 1-2200 


Cleveland 1 , Ohic 
E. 6th St. & Superior 
Ave 


CHerry 1-7900 


Dallas 1, Tex. 
500 South Ervay St. 
Riverside 8-5611 


Denver 2, Colo. 
19th & Stout 5+. 
K Eystone 4-4151 


Detroit 26, Mich. 
438 Federal Bldg. 
W Oodward 3-9330 


Greensboro, N.C, 
407 U.S. Post Office 
Bidg. 


Tel. 3-8234 


Houston 2, Tex. 
405 Main St. 
CApitol 2-7201 


Jacksonville 1, Fila. 
311 W. Monroe St. 
ElLgia 4-7lll 


Kansas City 6, Mo. 
911 Walnet St. 
B Aitimore 1-7000 


Loe Angeles 15, Calif. 
1031 8. Broadway 
Richmond 89-4711 


Memphis 3, Tena 
22 North F'roat St 


JAckson 6-3426 


Miami 32, Fila 
800 NE. First Av« 
FRanklin 9-542 


Minneapolis 1, )dinn 


2d Ave. Soath and 


3d § 
FEdera! 2.3244 


New Orleans 12, La 


Chaites Ave 


New York 1, N.Y 
350 Fifth Ave 
LOngacre S377 


Philadelphia 7, |? 
L015 Cheitnat St 


WaAlout 3-2400 


Pitteburgh 22 
107 {Sixth 


GRant 1-5370 


Portland 4, Ores; 
520 SW. Morrison St 


CApitol 6-3361 


Hea 


Milton 4 


St. Louis 1, Mo 
1114 Miurket St 
MAin 1-8100 


Salt Lake City 1, Utah 
" < 


222 SW. Temple! 
EM pire 4-2552 


San Francisco 1, Calif 
555 Battery Ss 


YUkon 6-311! 


Savannah, Ga. 
25-29 Bull St 
ADams 2-4755 


Seattle 4, Wash. 
909 First Ave 


M Utual 2-3300 














MARCH 1959 





The VE ; S:; ’ 
USstnheESS thuation 


By the Office of Business Economics 











Business expects some recovery in 
CAPITAL OUTLAYS in 1959... 


Billion Dollars 


50 


TOTAL & 


oo 
> he 
Me 


‘ NONMANUFACTURING - 











4 



































1953 54 55 


but large SALES increases 


Percent Change 


10 





1958-59" 
Z 























1957-58 
actual 


PUBLIC 


MANUFACTURING TRADE UTILITIES 


mmerce, Office of Business Economics 














. : 
;CONOMIC activity has continued to expand under th« 
impetus of high consumer buying, a shift from inventory 
liquidation to restocking by business firms, and higher 
investment in both residential construction and industrial 
plant and equipment. National output has been larger in 
the first quarter, as the high rate of activity reached at 
vearend was sustained or extended. The recovery in GNP 
in the past year has been largely in real terms and the volume 
of current output represents a new record for the economy, 
appreciably in excess of the cyclical high reached in the 
summer of 1957. 

Employment has not changed much in the midwintet 
months, aside from the usual seasonal variations. As com 
pared with the corresponding period of a year ago, both 
higher employment and longer hours of work have con 
tributed to the enlarged output. New work force require 
ments have not matched the gain in output-——-a phenomenon 
typical of the earlier phase recovery periods—-so that while 
unemployment has been reduced, the drop-off has not been 
at a rate commensurate with the expansion of activity 

Purchasing power has continued to rise. Personal income 
in February was at an annual rate of $364% billion, up $1 
billion from January, and $5 billion above the rate for the 
fourth quarter. It was $12% billion, or 3% percent, abov 
the previous high of the summer of 1957. The major part 
of the expansion of incomes in the past year reflected a gain 
In real buying power as consumer prices were up less than 
1 percent. 

Wages and salaries, which make up by far the major share 
of the total, accounted for most of the gain in income over 
the past vear. This stemmed from increases in employment 
and hours worked, and from a continuing trend to higher 
pay scales 

Corporate profits—which are reflected im the personal 
income flow only to the extent of dividend disbursements 
are up sharply This national mcome component is espe 
cially volatile, shrinking sharply m recessions and rebounding 
in the same fashion as business improves. The lag in the 
availability of basic data makes impossible the calculation 
of corporate profits estimates with the same currency as thi 
other income flows, but it is clear that the advance in 
profits is contmuing 


Consumer buying advances 


As brought out in the article im this msue the cor slimmer 
has been a prime factor in the business recovery, just as he 
had been a sustaining influence in the preceding recession 
Retail sales in January and February were at a seasonally 
adjusted monthly rate of S17 billion, 2 percent above the 
fourth quarter average and 7 percent above a year ago 

The fourth-to-first quarter gain in sales reflects mainte- 





7 SURVEY OF CURRENT BUSINESS 


nance of the nignelr volume of purchasing reached in the 


Kaster sales re ports, for example, 
record il March 


are being purchased at 


final months of 1958. Pre 
point to a continumng cood 
Most of the 
rates above a year ago 
autos have been selling at al 
million, compares volume of 4 
An important feature of thi 
years has been the « x pande a uli ot foreign cars 
far this year are at an an ial rate 
total of 375.000. Only 
were 30.000 
Demand for oth 
well 


muior consumel line 
Domestically produced new model 
eXCeCSS of 5 
1958 


annual rate in 


with a million in 
automobile m cet in recent 
Sales so 
well above last year’s 
imports ol foreign cars 


sumer goods 


acuivily is 


has been 


Sustamed LI 


Shipments and New Orders 
Durable-Goods Manufacturers 
Major advance in steel 


Billion Dollars Billion Dollars 
i 7 
Iron and Steel industrial Machinery 


nelect 











Fabricated Metals 








Transportation Equipment Electrical Machinery 


Except Mot 


| 
| 
2 | 


0 





woo S37 58 59 1956 57 58 
Monthly Totals, Seasonally Adjusted 


U. S. Deportment 


and building materials producers at the 


March 1959 


serving to support purchases of large ticket home items, such 
as furniture and appliances. Demand for soft goods, which 
was generally maintained during the downswing in activity 
has moved well ahead of the prerecession level , 


Business investment higher 


for fixed and working capital has firmed con- 
siderably in recent months. As reported in our regular 
annual survey in this issue, business expects to install a 
moderately higher volume of plant and equipment in 1959. 

The quarterly pattern of fixed capital outlays indicates 
that the modest turnaround in such spending took place in 
the final months of last year, and in the current quarter 
outlays are scheduled to be about $1% billion, or 4 percent, 
above the fourth quarter annual rate 

Nonfarm residential building activity has been one of the 
Construction 


Demand 


major expansionary forces in the economy) 
put m place this quarter is expected to be at an annual rate 
of around $22 billion—higher than in the fourth quarter, and 
very considerably above the volume a@ year ago Private 
housing starts, which lead activity by several months, have 
been running at an annual rate of better than 1 million 
units since last October; this compares with starts of around 
900,000 a year ago. 


I ‘actory stocks rise 


shift in business investment programs 
While part ol t dollar in- 
creases represents highet replacem« nt cos he major share 
consists of additions to goods on hand Thu ventory 1n- 
vestment 1s currently adding to output in to early 
1958 when final demand was being partly m v a drawing 
stocks At the end of January 
still $4 billion under the year-ago total TI 
tion and improved sales have lowered t! 
months at the end of Janu: 198 |} 
The latter ratio 


The mayor recent 


} 


has been in inventories 


ISINeSS stocks 


down ol 

Weer’ is reduc- 

ry-sales 

ratio from 1.7 

months this January 
| 


cOFe 
mid-1955 


since 


ntrated in 
indus- 


Che early 
manufacturing, pri 


S SLOG ks ot 


1959 inventory Investment we 
cipally in the metal 
nonelectrical machinery ] s and of 
vehicle, electrical machine! and metais 
Nar 
tion equipment industries had contir 
rth December: the 


tie motol vroups 


vere uD segments of the mac! and transporta- 


! 
ity lida- 
1O! throug two gi ips nted fol 
vroods 


metal 


were 


billion reduct 


Stocks hel 


practically all of the $2 


ventories ove! tiie 


Veal 


| 


in most nondurable goods ind noderately 


nur-ago hgures, about 


and among food beverage comp: ( t! ig] 


with those of pa 


Thi ad 


huary rise ih nondurabl 


food il 


(OOS 
iemical industries 
the d and nondurabl s grou] put 


aterial were lnmcreases i 1 lor the 


InterruptLor recent downtre oods 


held by 


several months of 


coods produce! Os l ‘ ur 
stability | 


Cre broaden Yr OL Zoot 


irre d 
ve part, ment 


primary metal companies 


tories 


l trial 


Goods 


re flecting the ri 


Irhnaround inventory poli yar the 


Ol siderable Strength im residential Dul iodest 


ncKup in other tixed investment has parent 
npact oO! coods 


es, and 


acurvily 
steel out if and automobile 


manulacturimg 


more particularly in 





March 1959 SURVEY OF 
assemblies. Steel production reached a new peak in mid- 
March with the industry operating at better than 90 percent 
of capacity. No doubt a considerable factor in this picture 
is the restocking of steel by users of that metal. These 
stocks had been drawn down substantially during the 
recession and early recovery phase of the cycle. However, 
also of importance in the steel demand situation is the 
forward buying now going on, occasioned by the possibility 
of higher prices or a work stoppage later in the year. 
Automobile production has also been notably in excess of 
consumer demand for the past several months as manu- 
facturers sought to refill dealer showrooms with new models 
Some production schedules were curtailed in earlier months 
by work stoppages on important component parts, but with 
the recent settlement of the strike in the glass industry full 
production is once again possible. Currently, dealer inven- 
approaching desired levels and production may be 


tories are 
into line with sales to consumers and 


expected to move 
business users 
Total manufacturing activity was tilting upward in the 
first quarter. The pace of the recovery in factory output 
was most rapid last summer and early fall, and in the last 
several months moderating tendencies were in evidence 


Foreign demand 


nal markets have not been supplying any major 
influence to the economy. Export demand was 
in 1958 and thus far in 1959 there is no indi- 
As shown in a following 
there has 


Internatio 
stimulat 
off moderately 
cation of any significant change. 
section which reviews international transactions, 
been a marked shift in our trade position. 


Government purchases up 


ment purchases of goods and services appear to be 
current quarter, principally reflecting 
e and local governments. Federal 
following closely the 
in the 


Gover! 
up somewhat 1n the 
a further increase by Stat 
has tended to flatten out 
ticipated in the Budget presentation early 
last month’s SURVEY. 

Govern! responding to the 
pickup in profits and other income. Again 
the revenue picture emerging to this point 
is in line projections which involve a considerable 
narrowing of the Federal deficit. 


purchasing 
pattern 

year, ana rr ewed 
substantial 
as in the case 


revenues are 


ol expel aitures 


Prices stable 


The general wholesale price average so far this vear has 

unchanged from a vear ago, and the consumer 

ntinues to fluctuate within a narrow range. 
prices rose to new peaks in early 1959, the 


been virt 
price ind¢ 
Stoc! 
February being about percent above 
third above a yea 


average [tor January 
that tl! yurth quarter and almost one 

ields remain close to their postwar lows, the 
changed recently with rising 
fall-off in profits 


flow of d ds not having 
profits s they did not drop with 
during the recessio1 

The mo authorities early in March increased the dis- 
count rat borrowing from the Federal Re- 
serve third such action taken since 
early last fall, and the current rate charged by the New York 
bank is no percent compared with the low of 1% percent in 
Long-term U.S. bond yields reached 4 
new high for the postwar period, and 

t percentage point above a year ago. 


.?¢ d on bank 


Svste This was the 


ths ol 

porat long -term bonds have not changed ap- 

last fall and are currently about one-half of a 
above a year ago. 


CURRENT 


BUSINESS 


Manufacturers’ sales and orders 


The rise in manufacturers’ sales and new orders has con- 
tinued into early 1959—although the most recent figures 
show some slackening in the rate of gain as compared with 
earlier months of recovery. Incoming orders in January 
were one-sixth above a year earlier, and just 5 percent off the 
late 1956 peak. All major industries were receiving orders 
in January well above year-earlier rates 


Steel activity expands 


January witnessed a sharp spurt in the ordering of iron and 
steel products (see chart) and a more moderate advance for 
nonferrous metals. In steel, incoming business expanded 
by a third over the December seasonally adjusted rate. 
This increase on top of the rapid acceleration in steel buying 
during 1958 brought the January total to a record in terms 
of both dollars and volume. 

Backlogs on the books of iron and steel producers ad- 
vanced sharply to bring the end-of—January aggregate well 
above a year ago. 

In fabricated metals, including structural products, heat- 
ing and plumbing equipment, and builders hardware, there 
was some expansion in sales and orders during January but 
on a more moderate scale than in the iron and steel industry 
Backlogs-sales ratios were still well below year-ago rates 


Machinery orders up moderately 


The nonelectrical machinery group, which had shown the 
smallest from early 1958 troughs of any major 
hard goods industry, reported an increase in the seasonally 
adjusted rate of deliveries for the opening month of 1959 
The flow of new orders group advanced nearly 10 
percent. The bulk of the rise occurred among companies 
producing agricultural, construction, mining, and office and 
store equipment. The unfilled orders rise in January for 
all nonelectrical machinery companies held the backlog-sales 
ratio over the month relatively unchanged following a 
considerable decline. 

In electrical machinery, sales showed little change in Janu 
ary, While orders and backlogs edged off. This industry re- 
acted only moderately to the recent recession and has since 
shown strength The backlog sales ratio for the electrical 
machinery group is close to that of a year ago primarily 
on the performance of companies i the radio-electronics 
communications field 


recovery 


to the 


Divergence in transportation equipment 


Activity in nonautomotive transportation in recent months 
has reflected divergent 


In the dominant 


{ among component mn 
sales of commercial 


tantially whereas de 


movemel 
clustries aircraft area 
iL tplanes and ol missiles have risen s ib 
liveries of military aircraft have declined 

Sales and backlogs of unfilled orders have been improving 
her types of transporta 
although January figures were still well be- 
Trends in this industry reflect the turn 
companies 


in recent months for produ ers ot ot 
tion equipment, 
low year-ago rates 
up im nmvestment programs ol transportation 
reported elsewhere in this SURVEY 

Sales of at ndurable 
erate but rather steady upturn 
cent them recession low The 
yroups have recorded the largest relative 
im part reflecting their sharper previous declines. During 
January there was further rise in deliveries by these 
industries. The paper and chemical industries reached new 
sales records in the late fall and early but January 
little 


coods produce have shown il mod 
and in January were 10 per- 
above petroleum and textile 


improvements 
SoOTnEC 


winter 


deliveries were off 





Payments Excess in International Business 


Continues High 


UNITED States international payments exceeded receipts 
by nearly $800 milli in th I f 1958 resulting 
in a corre pol a d dollar hold- 
taken by 


ings About > 
was ke pt 


foreign countrir 

in various fort 
Total net p 

i(wo precedit 


oy the 
to the 
annual service ember and to 
various other for seasonal 
factors, net payment were | nore thal during the 
earlier part of r $4 billion at ar 
annual rate) 

For 1958 as a whol het pay nt wel about 
billion, of W hie ! é bill 

Although « Ler! trans? I Luring 1958 
resulted in a nts aite! 
allowance for 
trend after the 
and payments wel i 

Recorded payme! { I is irom 3 lnira 
$25.8 billion in the first quarter 98 to about $27.6 billion 
in the last quarte! The latt uid Hay 1a new high 
except for certal cial transact 3 Ww! aised payments 
during the 
billion. (Large 
loans and investments in ol mes ns i eZUE 
about $1.4 billion at 3 annus at to our payments at 
that time.) 

Recorded ree 


$3.4 


a Tising 
receipts 
recession 


( ol about 


vuarter oO 7 tt ‘ ea ite of S285 


ol le I ad lease 


secona 


la added 


payments, 
from an annual rate quartel ol 


Table 1.—U.S. Balance of Payments Seasonally Adjusted (Exclud- 
ing Military Grant Aid) 





U.S. payments, total 
Impor tot 


US. receipts, total 
Export t 


MI 


} 


1 ' 
Errors and omission 
Increase in foreign gol« 


through = transactic 
States 








1958 to $23.6 billion in the last quarter. This was about 
$1.8 billioft under the rate a year earlier and $4.5 billion 
below the recent peak rate of $28.1 billion in the first quartet: 
of 1957 (which was unusually high, however, because of 
many extraordinary transactions 

As the vear progressed, the rise in recorded rec ipts sea- 
gradually approached the rise in recorded 
inter- 


sonally adjusted 
payments, and in the last quarter both sid 
national accounts increased by about the same amount 


if continued, 1 | { that 


While this development, 
national 


the highest point in the net payments o1 
transactions has been reached, and that the balance on our 
foreign transactions from now on will gradually improve, 


such a conclusion may still be premature Special and 


may have affected recent trans- 


possibly temporary factors 
to rather different 


actions; the rise in payments was duc 


types of transactions from the rise in recé pts 


Imports rise to new high 


Merchandise imports advanced from the first to the fo irth 
quarter by $2.1 billion at an annual rate, and other purchases 
by $600 million Most important among the latter were 
military expenditures which reached a peak in the third 
quarter (due to large payments on construction contracts 
but came down somewhat in the fourth. The rise in the 
outflow of funds through higher purchases abroad was, in 
part, offset, however, by a moderate decli in the net out 
flow of private capital 

Merchandise Imports, which after seasonal adjustme 
advanced from the first to the second quarter and remained 


nt, had 


at the higher level during the third quarter, ros 
sharply during the last quarter of the vear After having 
been below the previous peak annual rat ' $13.4 billion 
reached in the latter half of 1957, for a ps 1 of about a 
vear, merchandise imports passed the earlier high and ad 
vanced to a rate of $13.8 billion per year in the last 3 months 
ol 1958 

‘| he large Veur-el 


about $12.9 billion 


“gain 


id Increase brought ti total oO! G58 to 
less than $200 mil percent 


omitting the sp mports 


bye low the previous year 
mentioned earlie! 

The 1957-58 decline was considerably 
the previous high considerably fast 

; 4 recessio! At that time \ 
% quarters before the previous pea 
as during the 
larters although prices were declining 
that the fourth quarter 1958 figure 


more recent reces 





March 1959 


accumulation of transactions so that a relapse may still occur 
in the early part of this year. 

The most recent rise in imports can be attributed only in 
part to the recovery in industrial production. 

The major raw materials which were imported in larger 
volume in the last quarter of 1958 than during the cor- 
responding period of 1957 were wool, sawmill products, and 
wood pulp. The rise of $32 million in these imports re- 
flected mainly the higher activity in residential construction 
and in the woolen textile and paper industries. 

Of the major metals and metal ores, imports of copper rose 
by nearly one-third from the third to the fourth quarter of 
1958, but were still less than in the last quarter of 1957. 
However, relatively low inventories and a firming of prices 
which continued into 1959 suggest that the fourth quarter 
more than seasonal advance. Nickel 
imports dropped off sharply from the third quarter because 
of strikes in Canada. Only tin imports were slightly higher 
in the fourth than in the previous quarter and a year earlier. 
Imports of iron ore, manganese, tungsten, lead, zine, and 
bauxite were less than a year ago, although for some of these 
metals imports rose slightly from the third to the fourth 
quarte! 

In the aggregate, imports of metal ores and refined metals 
during the fourth quarter of 1958 were about $20 million 
less than in the third, and about $80 million lower than in 
the last quarter of 1957. With allowance for seasonal 
factors and the interruption in nickel production, it seems 
that the drop in such imports was halted in the fourth 
quarter, but that any recovery was very slight and selective. 

Of other major raw materials, imports of rubber rose 
considerably in the fourth quarter of 1958, but still remained 
smaller than a year earlier; imports of hides, skins, and furs 
were up from the last quarter of 1957. 

Although imports of raw materials at the end of 1958 did 
not quite reflect the increase in industrial production, it 
may be recalled that the effects on imports of the downswing 
in production during 1957 were also delayed by many months 
during which large inventories were accumulated. Also, in 
the case of many commodities the impact of the decline in 
demand was greater on domestic production than on imports 
and it may be expected, therefore, that the upswing in 
demand would stimulate domestic output more than imports. 

The recent rise in imports appears to have been due mainly 
to higher purchases of commodities other than raw materials. 
some ol hese increases may be due to special, temporary 
factors, and some to more basic trends not related to cyclical 


rise constitutes a 


factors 
Petroleum 
$50 million 


imports in the fourth quarter of 1958 were up 
from the previous quarter and by the same 
last quarter of 1957. Much of the rise 

December and appears to have been 


amount from the 
which ( I n 
slightly than seasonal, was perhaps due to accelerated 
buying 


in Maré 
Import 


nticipation of mandatory quotas imposed early 


meat products cattle, and fish were about $50 
million a year earlier, but only slightly more 
than in the rd quarter of 1958. The rise in import demand 
for these products which started in the latter part of 1957 
Cocoa imports were up 


than 


apparel tl lost most of its force. 
million over the third quarter, and $9 million 
quarter of 1957— reflecting relatively low in 

the earlier part of 1958. Sugar imports dropped 
than usual from the third to the fourth quar- 
well above the fourth quarter of 1957 The 
i earlier in the vear and the decline in Puerto 
on were responsible for most of the import rise 


by about 


fourth quarter of 1958 were 


pts during the 
Most of the change was in 


than a year earlier. 


SURVEY OF CURRENT BUSINESS 5 


prices which declined from 47 cents to 40 cents a pound 
The volume was about 3 percent less than in the last quartet 
of 1957, when it was relatively high to make up for post- 
poned imports earlier in that year and to replenish inven- 
tories. At the end of 1958 a comparable increase in stocks 
did not take place. In fact, yearend stocks were the lowest 
since 1954. Thus, the volume of imports in 1959 will have 
to be maintained even to meet current consumption require 
ments. The continued decline in prices, however, may hold 
down the value of imports 

Total foodstuff rose somewhat more than seasonally from 
the third to the fourth quarter of 1958 and thus contributed 
to the overall rise in seasonally adjusted imports. However, 
at least part of this rise appears to have been due to tem 
porary factors. 

Most of the upswing in total imports may be attributed to 
higher purchases of machinery and vehicles, iron and steel 
mill products, other durable producers and consumer goods, 
and gem diamonds. Imports of these commodities were up 
about $150 million, or one-third, from the corresponding 
quarter of 1957—by about the same amount as total met 
chandise imports. in part this may be attributed to the 
rise in incomes and consumer expenditures and, as in the 
case of the higher steel imports and capital goods, to larger 
business expenditures. To some extent, however, the in 
crease reflects changes in domestic consumer preferences, 
and in the competitive position of foreign products. These 
changes became evident earlier but were intensified last year 
and are largely independent of the cyclical upswing. 

Summing up these various trends, it appears that a decline 
may be anticipated in imports which were temporarily en 
larged by special factors, particularly those of petroleum and 
certain foodstuffs. The downward trend in coffee prices 
may also result in lower import values. These declining 
tendencies may be more than offset by the upward trend in 
imports of manufactured goods which so far has not shown a 
tendency to flatten out, and by some rise in lagging imports 
of raw materials for durable goods industries. The result, 
however, will be a slower rise than at the end of last year 


Diverse trends in capital outflow 


The aggregate net outflow of private capital during 1958 
was about $2.9 billion, only $300 million less than in 1957. 
The composition, however, changed considerably. Direct 
investments fell from $2.1 billion to about $1.1 billion, while 
other capital outflows increased from $1.1 billion to $1.8 
billion. 

The $1 billion drop in new direct investments affected 
primarily the petroleum and manufacturing industries. The 
decline in petroleum investments— from about $1.3 billion in 
1957 to approximately $600 million in 1958—-was in part due 
to the lack of large new cash outlays such as the purchases 
of oil concessions in Venezuela, which in 1957 absorbed about 
$360 million. The completion of major pipeline projects in 
Canada was another factor in the decline 

Capital outflows to manufacturing enterprises which in 
1957 amounted to $370 million were reduced by about one 
half in 1958. A large part of the decline was due to lesset 
capital requirements in the aluminum industry which ob 
tained relatively large amounts of new capital in 1957 

These declines affected mainly Latin Ame rica, where direct 
mostly in the petroleum industry—dropped by 
$700 million, and Canada where they were $230 million less 
Net capital outflows through direct investments to Kurope 
were moderately lower and to Asia and Africa slightly highet 

The decline of new direct investments from the previous 


1 


high occurred largely toward the end of 1957 when industrial 


Although much 


investments 


expansion Was falling off in manv countries 





SURVEY OF CURRENT BUSINESS 


March 1959 
Table 2.—t 


.S. Balance of Payments by Areas— 


Western European dependen 


IT | Ulrr {ty 


Exports of goods and services a5, Cf oS 092 5 78 2,015 2 
total 





, 223 1, 880 2, 160 


Military transfers under f 5 5 5 487 4101 
grants, net, total 


Other goods and services % , O75 5. 5 5 > } 6,791 1,614 1 
total 

Merchand 
lodir 


rar 





10 Direct 

I! Other priva 

12 Government 

13 | Imports of goods and services 
tota 

4 Merchand 
cluding 1 


Government 
Balance on goods and services 
ota 
Excluding military transfers 
Unilateral transfers, net 

foreign countries 

Total 

Excluding military trans 
fers 


71 491 
153| — 216 
Private remittance 
Government 
Military 
ery ice 
Other grant 
Pen 
transfer 





U.S. capital, net [outflow of 
funds . total 
Private, net, total 


Direct ir 

New is 

tedempt 

Other lor 

hort-tert et 
Government, net, total 

Long-tern 

Repayt 

hort-ter 


Foreign capital, net [outflow 
of funds total 
Direct and 

folio in 
than | 
ecuritie 

Transact 
ernmer 
hort-term 
eign t 
tution 

Other short-te 


al 


Gold sales (purchases 
the United States 


47 | Foreign capita 


48 | Errors and omissions and 
transfers of funds between 
foreign areas ([receipta by 
foreign areas net 

Memorandut 

1} Increase tr 

| foreign g 

| liquid de 


2 Through « 











* Revised » Pre 
1. Reported gold 
2. Equals baiance 
individual area 

















March 1959 


1957 Annual; 


SURVEY OF CURRENT BUSINESS 


1958 Annual, and by Quarters 


Latin American republ 


1958 


[Millions of dollars] 


All other countries 


Year? | 


International institutions 








1, 469 


24 


, 445 


, 059 


163 118 176 ~ 535 —s4 





1, 469 


28 


1,441 


| 
1, 039 


—81| 


® 
5 


D5 


f 119 


. 


| 


—210; —1600 





5, 375| 


3, 954) 


466 
34} 


191 
85 


Sl 


515 
3s 
31 


5,509, 1, 397) 


| 


ae 


4, 563) 
3, 169 


415) 




















represents gold obtained by foreign countries outside the United 


of Commerce, Office of Business Economics 








lable 3.—U.S 


SURVEY OF CURRENT BUSINESS 


Balance of Payments with the Sterling Aream—1957 Annual; 1958 


Annual, and by Quarters 





Exports of 
ATilit 


Other goods anc 


Mf 
r 


Imports of goods and services, total 
Mor 


Balance on goods anc 
Total 
Excluding military 


transfers foreig: 


Unilateral 
untries 
rot 
Excluding military transfers 
| ‘ 


U.S. capital, net 
total 
Private, net 

Dir t 


total 


Covernment, net, total 
| 


Foreign capital funds 


total 


Cold 
United Stat 


sales (purchases 


Foreign capital and 





nss nes 


11 116 


ness; nss nss nse 
63 lf 15 16 


i 




















nse 
M4 


nse 


61 


nss 


nss 


nss 


128 





March 1959 


smaller than in the previous year, direct investments within 
the year 1958 were rather stable, and in the last quarter were 
even slightly higher than a year earlier. 

Other capital outflows, particularly new issues of foreign 
securities, were at a postwar record, but reached their high 
point during the first half of 1958 and fell off during the latter 
part of the year. Although there was some revival of new 
issues during the last quarter of the year, partly in conform- 
ance with the usual seasonal pattern, the broad trend re- 
flected the changes in the capital market from relatively 
favorable conditions early in the year to a tighter money sup- 
ply and higher interest rates during the second half. 

The net outflow of funds through medium- and short-term 
credits showed a somewhat similar pattern. Such loans 
reached a peak in the last quarter of 1957, stayed rather high 
through the second quarter of 1958, and then dropped sharply 
during the second half of the year. In the last quarter of 
1958, the net outflow of such funds was down to $34 million, 
compared with $212 million a year earlier. 

The tightening of the capital market and rise of interest 
rates, which in itself discourages borrowing, was also in con- 
trast to the relative expansion of available capital and the 
decline in interest rates in certain parts of Europe. These 
tendencies continued into 1959. As long as these conditions 
prevail, the outflow of capital from the United States through 
new issues of bonds or loans is likely to remain comparatively 
low 

In contrast to these forms of capital movements, the out- 
flow of funds through purchases of outstanding foreign secu- 
mainly stocks, increased steadily during 1958. Pur- 
chases of foreign stocks were stimulated by their higher 
vields compared with domestic stocks, and by the desire of 
nvestors to diversify their portfolio. During the 
last quarter of 1958 recorded net purchases of foreign stocks 
were over $90 million. A further increase of investments in 
European stocks was reported for January. 

The net outflow of funds through Government grants and 
capital transactions in 1958 was almost the same as in the 
preceding year. The net accumulation of foreign cur- 
rencies through the sale of agricultural products declined 
during the vear and changed to a reduction of such holdings 
during the last quarter. Sales of agricultural products for 
foreign currencies during this quarter were higher than a 
vear earlier, but the utilization of such currencies for grants, 
loans, and other Government operations overtook current 


rities, 


domestic 


acqulsitlo! 

Disbursements by the Export-Import Bank increased 
during the year, although the fourth quarter was not quite 
so high as t! third, when large disbursements were made to 
Brazil and the Bank took over from private United States 
banks a la ore loan LO Colombia. 


EXPORTS REMAIN LOW 


The e in seasonally adjusted receipts during 1958 from 
low point in the first quarter was mainly the result of 
el nes on United States private investments abroad 


ous services transactions. The rise in invest 


from 

neomes, however, reflected only in part higher current 
About $75 million of 
obtan ed during the last quarter of the year was 


he foreign enterprises 
ilie¢ to a dend disbursements of foreign subsidiaries of 
Americ: prior years. The 
cone frrures lo! the 


recent rise 1n tax liabilities to Venezuela 


‘ 
ompanies from earnings in 
entire year have been reduced to 


SURVEY OF CURRENT BUSINESS 9 


Seasonally adjusted, exports during the last quarter of 
1958 were at an annual rate of about $16.2 billion, approxi- 
mately the same as during the first three quarters of the 
year. The rise in actual exports from $3.8 billion in the 
third quarter to $4.2 billion in the fourth appears to have 
been not more than the normal seasonal movement. Com- 
pared with the corresponding period of 1957, the decline 
narrowed down from 20 percent in the first quarter to 10 
percent in the fourth. For the year as a whole, exports 
were about 16 percent smaller than in 1957. 

Although seasonally adjusted figures for 
details are not available, comparisons with the corresponding 
quarters of the preceding year indicate certain differences in 
export developments. 

During the early part of 1958 the decline from the previous 
year was most pronounced for agricultural products, coal, 
petroleum, copper, iron and steel mill products, and scrap. 
Foreign sales of finished manufactures fell only by 4 percent 

Exports of agricultural products other than cotton changed 
in trend, however, and by the last quarter were about 6 
percent higher than a year earlier 

The year-to-year decline in petroleum exports was much 
smaller in the latter part of 1958 than during the first half, 
when it reflected the disappearance of the extraordinary 
exports early in 1957 follow ing the closing of the Suez ( ‘anal 
However, petroleum exports continued to drop even after 
these extraordinary shipments had stopped 

For coal, as well as iron and steel mill products, the export 
decline seems to have continued although perhaps at a slower 
rate than earlier in the year. Large stocks of coal in Europe 
and recent import restrictions imposed to protect local 
production, as well as the growing use of fuel oil, will depress 
the demand for coal from this country still further. Scrap 
exports have dropped to a very low point early in 1958; the 
decline since then has been relatively small 

Cotton exports, however, which seemed to be stabilizing 
earlier in the year, dropped again compared with 1957 during 
the last quarter of 1958 and, percentagewise, were even far- 
ther below the previous vear as during the first quarter 

For machinery and vehicles, comprising the major part of 
the exports of manufactured goods, the decline from a year 
ago widened considerably during the second quarter of 1958 
but narrowed somewhat during the latter half of the year 
Within that group exports of construction machinery, tra 
tors, miscellaneous industrial machinery, new passenger cars, 
and civilian aircraft indicate a continued weakening in 
foreign markets 

Electrical machinery and equipment 
equipment) maintained their foreign sales 
metalworking machinery including 
to rise Shipments of railroad equipme nt were also higher 
than in 1957, but most of these shipments were financed 
under Government-aid programs 

Foreign markets for chemicals 
strengthened somewhat curing 1958 


commodity 


including household 
and exports ol 


machine tools continued 


also appeared 1o have 
Exports at the end of 
the year were slightly above (hose a year earlier, whereas 
in earlier quarters they had been smaller. The gain was 
mainly in industrial chemicals, while medicinals were gen 
erally weaker 

The stability in exports thus appears 
rises in agricultural products other than cotton 


and in certain specialized industrial products such as metal 


to have been due to 
coppel 


working machinery and certain chemicals for which foreign 
demand continued to expand or our products are technically 
These 


ot cotton 


more advanced than those of competing countries 
rises were offset, however, by declining 
fuels, and other industrial products, but for many of these 
products the rate of decline slowed down toward the end 


of the year 


‘ xports 





10 SURVEY OF CURRENT BUSINESS March 1959 


This general patter do¢ t vet dicate il early re- conversion of such holdings into gold. During the first 
covery in export In fact, January 192 <ports were still half of 1958 about $1.2 billion of Government securities were 
8 percent below those in Janu: sold by foreigners but about the same amount was purchased 

during the second half of the year. 
Gold outflow slou ed Another factor may have been the need for dollars by the 
: United Kingdom to meet the annual service charges of 

Although th { pa bal: corded transac nearly $200 million on the United States and Canadian 
tions increased | ‘ iarter of 1958 than in the postwar loan due at the end of the year. Dollar funds of a 
preceding quarter and declin at in last quarter, similar magnitude will be required by the United Kingdom 
this developme! wa y reflected in the outflow of this spring to repay a part of the 1956 dollar drawings from 
gold and dollar he res was the relatively wide fluctua the Monetary Fund. 
tions in the net of unrecorded transaction Errors and Preliminary estimates (reflected in memorandum lines 1 
Omiussions”’ For the year 1958 a whole, these residual and 3 of table 2 in the columns for “All areas’’) also indicate 
transactions amounted to net receipts of about $380 million that relatively large amounts of gold from sources outside 
This represents a considerable drop from net receipts of the United States became available during the last quarter 
about S$SS80 million u 1957 and also from the re siduals in of the vear, thus lessening the demand for U.S cold The 
1955 and 1956 share of gold in the total foreign gold and dollar gains was 

To a certain extent this residual in the balance of payments about the same in the third and fourth quarters 
reflects recurring transactions for which estimates cannot he About $3.7 billion of the $4.3 billion total gold and dollar 
made. The large increase in 1957, however, suggests certain cains in 1958 by all countries (including about $840 million 
special receipt bably as a result of capital movements in gold acquired from other sources than the United States) 
from Kurope to tl United State vhich escape d the usual was accumulated in Western Kurope. Canada rain d about 
recording procedur Such capital movements occur gen $180 million, Japan $375 million, and the international 
erally in times of financial and political uncertainties. institutions about $450 million. Latin America, however, 


The drop in the residual in 1958 may reflect some net re lost about $330 million of its gold and dollar holdings. 


turn flow of capital Howevel! { a net balance and The area distribution of foreign gold and dollar rains 
consequently may be compose 3s currents in such changed relatively little during the year, with Europe con- 


capital transaction Thus, the capital to tinuing to absorb by far the largest shar Within Europe, 


Kurope may have bee! eonsiderabdDly tare thal suggested however, the gains of the United Kingdom were hirhest in the 
bv the size of the overall residual and offset by inflows from second quarter and slowed down during the second half of 
other parts of the world, particularly the Far East earlier in the year, while those of Italy rose throughout the year 


f of the year The large rise in European reserves during 1958 followed 
| 


1958 and Latu America during the second hal 
The rather low residual during the last quarter of 1958 may a period of more than a year during which many countries in 
in part be due to purchases of foreign stocks by United States the area lost reserves or had to incur short-term debts The 
residents which were not made through United States brokers rise was large enough, however, to permit a further liberali- 


f r 


or banks and, therefore, were not reported by them zation of exchange restrictions and to enable most European 


Although net dollar payments to foreign countries re- countries to make their currencies, if held by residents of 
mained at a quarterly rate of nearly $1 billion beginning with other countries, convertible. 
the second quartel of the vear, the outflow ol cold declined Although reserves of some of the major Kuropean countries 
steadily from the second quarter peak. The decline con are still low relative to the size of their foreign transactions 
tinued into this year, and in February foreign gold purchases and commitments, the continued increase of European gold 


had virtually topped ‘| hie des line comecided With a rise in and dollar holdings made it possible also for the various 
interest rates in the United States which made holdings of countries to adopt measures to stimulate their economic 
United States Government securities or time deposits in activity The liberalization of trade and a faster expansion 


banks more remunerative, and consequently increased the in business activity should—in time—have favorable reper- 
potential loss in interest incomes which would result from the cussion on our exports 











by Murray F. Foss + 


Business Anticipations of 
1959 Investment and Sales 


BustvessMEN expect to make a moderate increase in 
their plant and equipment expenditures this year, according to 
the 1959 annual survey of investment and sales anticipations 
conducted by the Office of Business and the Securities and 
Exchange Commission. The scheduled rise is $1 billion, or 
4 percent, more than last vear. 

The corresponding expectation for 1959 sales is for a 9- 
percent increase in manufacturing and public utilities, and 
for a 6-percent rise in trade. 

The capital expansion for 1959 centers largely in manu- 
facturing, the airlines, and gas utilities. Most of the other 
major industry divisions expect little change. Public 
utility spending will be close to the 1957 record, while the 
airlines, with large deliveries of jet aircraft coming, will 
make record capital outlays. 


Table 1.—Percent Change in Plant and Equipment Expenditures 











The quarterly figures indicate a rise from a seasonally 
adjusted annual rate of $30 billion in the fourth quarter of 
1958 to $31 billion in the first 3 months of 1959 and about 
$32 billion in the second quarter, 

The survey data also suggest an annual rate of expenditure 
in the second half of this year not much different from that 
expected for the second quarter. To judge from past ex- 
perience the realization of the implied second half rate of 
expenditure will depend largely on the course of business 
activity through the year, and the prospects thus suggest 
that there may be an expansion of plans as the year develops. 

Of the past 5 years, for example, for example, in the reces- 
sion years of 1954 and 1958, expenditures were, respectively, 
about the same and a few percentage points lower than im- 
plied; in 1957 spending was slightly lower as a result of the 
general downturn in the fourth quarter of that year. By 


O88 IS ASSISTANT CHIEF, BUSINESS STRUCTURE DIVI 
OF BUSINESS ECONOMICS 


way of contrast, actual second half expenditures were more 
than 10 percent greater than implied in 1955 when the econ- 
omy recovered and rose to new highs, and a few percent higher 
in 1956, when the investment boom was in full swing 

While the annual change from 1958 to 1959 is not large and 
reflects a measure of uncertainty about future developments, 
the quarterly data indicate that there has been a distinct 
change in attitude by business toward capital expenditures 
over the past few months. First, actual investment in the 
fourth quarter was the same as the amount projected 3 
months ago—a change from the pattern of downward re- 
vision which had been evident since the final quarter of 1957 
Second, businessmen have made an upward revision in spend 
ing for the first quarter of this year—again, in contrast 
with the recent experience. 


Quarterly changes 


The 1957-58 investment downturn reached its low in the 
third quarter of 1958, with a seasonally adjusted annual rate 
of expenditure of $29.6 billion—some $8 billion less than 
the high of four quarters earlier. The fourth quarter of last 
year reflects divergent movements, with small decreases in 
manufacturing and railroad investment more than offset 
by a large rise for airline equipment and small increases 
elsewhere. 

The $2 billion rise in the seasonally adjusted annual rat 
that business expects from the fourth quarter of 1958 to the 
second quarter of this year would bring the total back to 
where it was last spring. The advance is scheduled about 
equally in both durable and nondurable manufacturing 
groups. The gas utilities plan a sizable expansion over this 
period 

A number of factors may be cited in explanation of the 
currently reported intentions. Broadly speaking the pickup 
in investment is related to the recovery in overall economic 
conditions, with the marked improvement in sales and earn 
ings from the recession low points; in turn, these develop 
ments have riven rise to favorable expectations for sales and 
profits in the near-term. New orders have been rising, the 
decline in unfilled orders has been reversed. Profits in pat 
ticular have recovered sharply since the first half of last year 
with a resultant favorable effect on the liquidity position of 
business. 

Not all of the currently planned increase stems directly 
from the recovery. For example, in the case of the airlines 
the large investment rise is primarily of an autonomous 
nature, stemming from technological though the 
improvement in general business facilitate its 
financing 

The most important factor that has tempered the mag 
nitude of the recovery in investment is to be found in the 
degree of unused capacity in the economy, notably in manu 


1] 


change, 
should 





- 


facturing Ir industries capacity 1s 
quite ample to sati irrent and neal 
quirements \ easures of capacity are 
lacking In many ines novlor [ we stand is 
provided by a ompa t rroduction with 
the peaks reached 


If the top l rie 


term production re- 


overall output 





Plant and Equipment Expenditures 


Total Manufacturing 
Ai 

ad . 

a 


a )' 
*< 


Investment Expansion in Early 1959 
is Widespread in Manufacturing 
f 


Nondurable Goods 
Manufacturing 


~ Durable Goods 
Manufacturing 


4 


Utility and Commercial Outlays Stabilize — 
Transportation Industries Rise 
20 


59 60 


t Annual! Rates 











12 SURVEY OF CURRENT 


BUSINESS March 1959 
but by the individual high reached in each industry, it ap- 
pears that in durable-goods manufacturing, the aggregate of 
these high marks is well above the rate of prod iction in early 
1959. although in nondurables, the combined high is little 
different from current output 

The significant point however, is that these peaks were 
generally reached more than 2 vears ago, so that subsequent 
capacity installations which continued with the re- 
duced investment in 1958 current 
Even allowing for the fact that under- 
full « apacity opera- 
still eX- 


even 
must be added to rauce 
capacity. industry 
takes new expansion at some point below 
tions—and business, according to the latest survey 
pects an improvem nt in output in 1959 over current 
that output must 


nvestment plans 


rates 
of operation it seems reasonable to assume 
increase further betore major increases 
will be needed 

Aside from physical requirements industry may be ex- 
pected to make further investment for new products, to step 
up its outlays for modernization and cost-cutting and to 


meet the needs of changing veographic markets 


Manufacturing Programs 


since last spring manufacturing sales and output have re- 
gained much of the ground lost in the recent recession and 
manufacturing firms are now scheduling a rise in expendi- 
villion, or 7 percent, Ove! 1958. With few 
advance, 


tures of almost $1 


exceptions all industries are contributing 


to the 


as may be seen in table 2. 

Last of about 
billion less than the record expenditure made tn and 
two-thirds of the aggregate decline in 
If rough allow- 

roods, the 


post war 


vear’s outlay $11% billion was some $4% 
1957, 
accounted for about 
plant and equipment expenditures in 1958 
Is made for changes in the cost ol | 
manufacturing outlay was lower than in all 
1949 and 1950 
firm, the lareest 


more-than-averauge 


ears except 

By size of companies 
projecting a increase from 1958 t 1959 
\\ hile the 


average advances 


medium and 
This pattern is the reverse of the 
changes in plant and equipment expenditures that oc¢ 
from 1957 to 1958 

spending somewhat more than the overall 
cent, the programs were r‘ 
portionally 
companies cut spending 


less-than- 
actual 
irred 
then 
25 per 


small companies ¢ 


when the large compal s reduced 


aeciine of 
| } 
auced 


pro- 


companies’ 
small 


medium 


ibout the same as the ager and the 


relatively least ol 


lable 2.—Percent Change in Manufacturing Plant and Equipment 


Expenditures, by Industry, 1957-58 and Anticipated 1958-59 





Manufacturing 
Durable-goods industries 
I 


I 
Ele 


Nondurable-goods industries 
I i i} ; 


( 


| 











March 1959 


Small firms apparently picked up their seasonally adjusted 
rate of expenditures a little after midyear 1958 as the 
recovery progressed, The large companies, which in many 
industries were in a downward phase of major programs, as 
a group continued to reduce spending in the second halt. 


Table 3.—Realization of Investment Programs, by Industry, 1955-58 
Actual as Percent of Anticipated Expenditures 


| 19 





Total 106 100 








A breakdown of the anticipated capital expenditures in 
manufacturing into plant and equipment shows that equip- 
ment is scheduled to rise about 10 percent over 1958. Con- 
including oil-well drilling outlays of 
ileum refiners) is expected to show little change 

gh if the petroleum companies are excluded a 


struction expenditures 
the large pet 
In 1959, alt 


moderat« ecrease in construction is indicated. 


Durable-goods industries 


Investment in durable-goods industries on a seasonally 
rterly basis declined more than 40 percent from 
its peak in the recent investment downturn. Current 
schedules indicate a rise in the seasonally adjusted annual 
rate of close to $1 billion—or 18 percent—from the fourth 
quarter ol 1958 to the second quarter of 1959, and a further 
increase is implied for the final 6 months of the year. 

lron and steel produc ers expect to spend about as much in 
1959 as tl did last year, when investment declined almost 
one-third from the 1957 peak. The year 1958 marked a 
completion phase for most steel companies programs and 
the 7-million ton increase in ingot capacity in 1958 was almost 
as large n the preceding year. With steel output up 
sharply from the lows of 1958 many steel companies are now 


adjusted qua 


activating ew programs 

Of all major manufacturing industries, nonferrous 
metals is the only one anticipating a decline from 1958 to 
1959. Much of the year-to-year decrease in this group is 
accounted for by the fact that a major new aluminum 
producing facility was completed last vear; with this and 
the other completions there was a 400,000-ton increase in 
aluminum capacity in 1958. 

Despit improvement in sales so far in 
year ago, the motor vehicle industry is still operating con- 
siderably below output peaks reached in 1955. Producers 
in this industry are expecting a rise in capital outlays of 
almost one-fourth but from the extremely low 1958 figure. 
Deflated tment in this group last year was lower than 
in all postwar years except 1949, and 1958 current dollar ex- 
were even below depreciation allowances for the 
\ 20-percent increase in investment is scheduled 
producers of transportation equipment other than auto- 
biles. The implied seasonally adjusted expenditure rate 

cond half is within 10 to 15 percent of previous 


1959 over a 


pe nditur 


industr’ 


SURVEY OF CURRENT BUSINESS 


Electrical machinery companies are scheduling a sizable 
increase in investment over 1958. Examination of the 
quarterly data for 1958 indicates that the decline from the 
late 1956 peak was over by the third quarter of 1958; the 
defense program, continued strength in publie utility de- 
mand, and the recovery in consumer appliance sales were 
the major influences in the reversal of trend in outlays. 

Manufacturers of machinery other than electrical, on the 
other hand, have scheduled only a small rise in expenditures 
over 1958 with a rising trend evident for the current year. 
A good part of the annual 
producers of farm machinery, 
considerable buovancy in the last half year, 
sales of industrial machinery 


increase 1S accounted for by 
which have shown 
in contrast with 


sales of 


Investment up in nondurable goods 


The nondurable-goods industries recovered comparatively 
quickly from the lows in produ tion and sales in the 1958 
downturn, and by the end of last vear a number of important 
groups had achieved a rate of sales ¢ qual to or above previous 
highs This development Was an important influence in the 
stabilizing of investment in this field in the second half of 
1958. The earlier t-quarter 30 percent decline in outlays, 
after seasonal adjustment, while sizable, was less than in 
durables and briefer. 

Petroleum firms expect to increase their capital outlays 
this vear about 13 percent over 1958, to $2.7 billion: this 
amount is still well below the record expenditure of almost 
$3.5 billion in 1957. In 1958, company 
declined for the first time since 1949 Finished stocks ac 
cumulated, especially in the first half of the 
finery operations were reduced so that relative capacity 
utilization was the lowest since World War II 


sale 
UiCS 


petrol 1h 


year; and re 


Table 4.—Anticipated Percent Increases in Manufacturers’ Sales, 
by Industry 1958-59 


Total 
Durable goeds 
N 
Ek 
Machinery 
rransportat 


Stone, clay 


Nondurable goods 











The reductions in investment last year were relatively large 
for production, transportation, and refinery facilities while 
spending for the less: important categ marketing and 
other facilities—-was fairly well maintained From the peak 
annual rate of $3'% billion the decline to the third quarter of 
1958 was almost 40 percent, to the lowest rate of outlays by 
this industry since early 1951. 

The general improvement in the 
favorable inventory position, and the unusually cold weather 
last December resulted in an improvement in demand and 
profits, which was reflected in a stepped-up rate of outlay 
in late 1958. The seasonally adjusted data for 1959 indicate 
a generally rising trend through the year 


ories 


economy, the more 





14 


The 7-percer 
industry reflect 
and pharmaceut 
recession, exper 
primarily in thy 
further decreas 
completed 

The rise of 
producers reve 
the seasonally 


CURRENT BUSINESS March 1959 


hemicals 


Drug 
by the 


MMpanles 


a iling i 


al 


I 


( 


il 


be iy 


textile 
tinent 
alte! 





Manufacturing Plant and 
Equipment Expenditures 


Billion Dollars (ratio scale 


Primary Metols 


Petroleum 


Motor Vehicles 


Electrical Machiner 





Machinery Food & Beverages 


opt Ele 


Transportation Equipment 


Except Mot eb 





1955 56 57 58 59 
Quvorters, Seasonally Adjusted, at Annval Rates 


® Anticipated 


U. S. Department of Commerce, Office of Business Economics 











mid-1958 and is continuing through the second quarter of 
1959. Although some falling off is suggested in the second 
half, it should be noted that the industry typically does not 
hold firm to its investment expectations Paper and paper 
products companies’ investment is expected to be slightly 
higher im 1959 Realization of the increase sched iled in the 


first quarter this vear would be the first seasonally adjusted 


advance of consequence in approximately ; ars 

With sales of the food-beverage group at record highs last 
vear, 1958 investment was cut considerably less than in other 
industries; little change is anticipated in 1959 Alter the 
first quarter of 1958 seasonally adjusted investment pi ked 
up and then stabilized An increase is scheduled in the first 
half of this vear although a reduction l t 
second half, attributable largely to reductions by 


col panies 


Nonmanufacturing Industries 


Investment in nonmanufacturing declined less than 10 
percent last year Typically this investment has been less 
volatile than in manufacturing, partly because the group 
encompasses a number of industries in Ww! l nvestment 
changes have been offsetting and partly because it embraces 
industries like communications, electric and g itilities 
which are less sensitive to cyclical change thar 
This year these industries as a group are sched oy an 
investment rise of about 2 percent over 1958, | there is no 
iniformity in the industrial pattern of chang 


Railroads initiate expansion 


The railroads are planning capital investment 750 mil- 
lion in 1959, about t 


quarterly firures, however, it appears that ft asonally 


he same as in 1958 CCOl iz to the 


adjusted annual rate of outlays was at a low of $0.6 billion 
in the closing 3 months of 1958 and a sizable pickup has 
been scheduled by the second quarter Of this veal to an 
annual rate of $920 million The drop in outlays that is 


implied following the second quarter of 1959 probably rep- 


resents the short-run nature of the railroad investment plans 
at the present time 

The reversal in railroad investment that is evident in the 
data for the first half of this year follows the improvement 
in carloadings and railroad income that began around mid 
1958. Seasonally adjusted carloadings, after falling sharply 
for six successive quarters, rose somewhat in the third quar- 
ter of 1958 and markedly in the last 3 months of the year 
\ vradual decline of 2 years’ duration in construction expend- 
itures, seasonally adjusted, came to a halt around the end 
of 1958 Equipment expenditures, after falling about two 
thirds from the third quarter of 1957, are expected to increase 
starting early in 1959, and sharply in the second quartet! 


in 


Fixed investment by the railroads, though now improving 
must be judged quite low by postwar standaa The 1958 
and 1959 outlays are the lowest since 1946 in current dollars 
and well under that year in real terms. Freight cars owned 
by the roads declined last year after increasing slightly in 
1957 and at the end of 1958 stood 3 percent lower than the 
pe ak reached at the end of 1953. 


Utility investment high 


Klectric utility companies are scheduling a decline in 
‘ xpenditures of about 4 percent from the record high of 1958. 
This decrease is probably a delayed reaction to the 1957-58 





March 1959 SURVEY OF 
recession and the earlier decline in homebuilding, as a result 
of which kilowatt hour sales showed relatively small year- 
to-year increases of 5 and 2 percent in 1957 and 1958, re- 
spectively. The quarterly seasonally adjusted figures in- 
dicate that capital outlays declined from the first to the 
second half of 1958; the 1959 anticipations show a further 
decline in the first half foliowed by a slight recovery in the 
sec ond | alf 

According to trade sources the decrease in 1959 reflects a 
cutback in outlays for generating facilities, which reached 
a top in 1958; this is being offset in part by a rise in spending 
for distribution facilities, which had declined from 1957 to 
Capacity additions in 1958 totaled a record 12.5 
million kilowatts and are currently scheduled to total almost 
11 million in 1959. 

Gas utilities have scheduled their highest annual expendi- 
ture for 1959, more than 10 percent above 1958. The season- 
ally adjusted quarterly data indicate that the rise which 
began in early 1958 will reach a peak in the first half of this 
vear but some decrease is suggested in the second half. 


1958 


Trade and communications hold even 


(‘communications firms, after a record $3 billion outlay in 
1957, spent $2.6 billion in 1958 and are planning a like amount 
for 1959. The quarterly projections, after seasonal adjust- 
ment, indicate a slightly rising movement during 1959 

The firming in this industry brings to a halt a decline in 
seasonally adjusted outlays of about six quarters’ duration 
and of 20 percent from the peak reached in early 
1957 The recent decline was the first in this industry since 
1949 Investment by communications companies was Main- 
1953 rates during the 1954 recession but declined 
by approximately 40 percent from mid-1948 to the end of 
1949. following the investment boom in the early postwar 


’ 
aimost 


tained at 


period 
ent by commercial companies held up compara- 
1958 in contrast with the declines that occurred 
er areas of investment: spending by trade and 
ms was within a few percent of the 1957 total A 
tailers were holding back on plans for new stores 
centers in view of the uncertainty attached to 
se of retail sales in 1958 as well as to homebuilding 
Investment programs firmed, especially in the 
f of the vear, as retail sales were bolstered by rising 
income and housing activity rose steadily. Capi- 
1959 are expected to remain close to 1958 rates 


second 
disposal { 


tal out 


Record spending by airlines 


The $1.9 billion expenditure that has been scheduled for 
1959 by the transportation industry (aside from railroads) 
is a record amount and is attributable primarily to the air- 
lines. The airlines expect to spend twice as much this year 
as last, according to current schedules, deliveries of jet ar- 
began late last vear, are expected to reach a 

Water carriers are also anticipating higher 
ires but pipelines are expecting some cutback 


ecrait. whiel 
peak 1! 1960 


expendit 


Realization of 1958 Programs 


year businessmen spent about $14 billion less than 
anticipated in the survey conducted in the first 
Although the relative discrepancy of 
5 percent was slightly above the average (median) deviation 
of 3 percent for the postwar years through 1957, the annual 
survey correctly projected the very sizable decline in capital 
table 3 indicates, all major industry 


Last 
thev had 
quarter of 1958 


expendit ires As 


CURRENT 


BUSINESS 15 
divisions cut actual spending below planned amounts, 
except the nonrail transportation and commercial groups 

In durable-goods manufacturing all industries, except 
the miscellaneous category, cut outlays in 1958 below projec 
tions. Deviations were greater than average in the ma- 
chinery and transportation equipment groups and less than 
average in primary metals and stone, clay, and glass. In 
nondurable-goods manufacturing, only the textile and mis 
cellaneous nondurable-goods groups spent more than sched 
uled, although the negative food and 
beverages and paper were comparatively small. About 70 
percent of the negative deviation in nondurable manufac 
turing was brought about by the sharp reductions from 
planned outlays by the petroleum industry 

By size of firm, small manufacturing companies as a group 
exceeded expectations even after allowance for the usual 
small firm understatement, while medium and_ large-size 
firms spent less than planned, with the latter showing the 
greater shortfall 

The year 1958 was noteworthy in that the reduction in 


discrepancies m 


Manufacturers’ Sales Anticipations 


Percent Increase— 1958 Actual 
to 1959 Anticipated 


0 10 


Iron and Steel 
Transportation Equipment 
Electrical Machinery 
Chemicals 

Nonferrous Metals 
Nonelectrical Machinery 
Paper 

Stone, Clay, and Gloss 
Textiles 

Petroleum 


Food & Beverages 





U. S. Department of Commerce, Office of Business Economics 


spending from anticipations was greater than occurred in the 
two previous downturn 1949 and 1954, when ex- 
penditures fell only 1 percent below expectations The 
major difference with respect to the earlier downturns was 
that this time manufacturing companies reduced their out- 
lays substantially below expectations; previously manufac- 
turers’ actual outlays were about in line with anticipations 


vears of 





16 

In 1954, it may be 
much more thai 
dec reauses from en 
goods industri 
tained actual pen 
grammed. 


SURVEY 


ymobile nau 
helped 
the 


1959 SALES ANTICIPATIONS 


Businessme! 
mcreust Ove! 
a sales rise of 
mcrease of 6 p 


aa 


il combit ce 


‘ 
a rise of close 


have projected ‘ 
If th 


nondurabl 


f 


FYVGh ea tdd ane 


the sea 
mont 
the yeu! 
2 percent 
sales rate 
repre ent new 1 

All industrie 
1958 Steel 
have projected 
from their dep 
petroleum, and 
velitele thie ¢ 
uverave 

La t yea 
earl 
the ¢ 


survey 
small “] 
of the small pr 
ities the directi 
of change wa 
compared Ww 
revenues Tost 
cent advance 
sales project 
in the two. pre 
although the 
like that of 1! 
The (* sale 
the large neg 
manulacturi 
for x tile 
experienced | 
planned 


Work-in-Progress 


This year 
breakdown of tl] 
I-proyre il 
part of the 
work (plant 
The POULIN 
outlay 3 On pl 
panies were I 
cost when « 
started thi 
purposes, Lo 
in 1958. 


and the Initiation 


Projects 


OF CURRENT 


iry spent 


to offset 
a irable 
Mail 


nil pro 


Lohan 


of 


BUSINESS March 1950 

As was pointed out last year, the anticipated expenditure 
on hew starts 1s subject to considerable re either 
direction, depending chiefly on the subsequent course of 
Work-in-progress, hows Vel 
construction 


ViIslOr ih 
business activity. is subject to 
though 
spe ec d up or stretched Out Into al other Veal 
Of the $12.3 billion of capital outlays that 
have 1959, about $4¥% billion, o1 
estimated to be spent on work already in progre 
1959 Manufacturers expect during 195 
projects with an estimated value of close to $10 
which, $8 billion would be completed this yea 
In 1958 manufacturers completed $5 


less revision, large projects 


S( heduled Iti 


billion of 
arryover ol on January 1, 1958 
additional $5 7 billion Was spent on the SLO Db iI ) 
during 1958. As noted pi 

1958 lower that 


vinning of that ve ar, a 


WOrk-L progress 
projects started 
capital spending in was 
the be 
the projected value of t 
done in 1958 


current s§ 


expectations al 
occurred mainly in 


uch Wis LO be 
irve 
did in 
that 
time 
substant 


progress than they 
| ( * more 
W . of this 
any 
total cost of the new 


1 the 


hot planning 
| Ma 
} 
Phe 


compares total cost of WO 


\\ Tt? 
re : - 
1958S of about $10 billion 


This comparatively small increase iS 


overall advance in plant and « 


he fact that construction outla 


expected to iwnerease OV 
total 


well be ad usted 


not now 


total new starts and thus capital 


] 
aiready indicated may 


to improve through the 


9.—Business Facilities: Work-in-Progress and the Initiation 


of New Projects 





Manufacturing 
Durable-goods industries 


Nondurable-goods industries 


t 


Public utilities 











SURVEY OF CURRENT BUSINESS 


lable 6.—Expenditures on New Plant and Equipment by U.S. Business, 1956-59 





Seasonally Adjusted at Annual Rates 


mis industries 


goods industries 


her than rail 











by Louis J. Paradiso and Mabel A, Smith ¥% 





Consumer Purchasing 


ry 
Dive RELATI 


an important 
evelical Hie 
of consumpt 
decline in bo 
icone Hhihe 
of intere 
heretofors | 
al pureha 
the aid of 
data 

In mo 
geared to 
bu 11h cher 
Was us U i 
volvin lo 
changed a 
remained 
part becar 
rise ih Ube 
timing of 
social sea ull 

With the 
consume! 
hours of wor 
sSuving of mo 
pects improves 
where the upt 
1959 model 

The iainitel 
of business ins 
1958 was lar 
and it wa 
uptrend tha 
mnventory ara 


by the end of 


Cye lical variations in outpul 


The accompa 
of demand d lt 
In the 1957 
decline necou 
drop of $25 b 
1957 to thre 
clined $6 
$2 billion 
froups was 

LOT! 


PICA’ 
DIVISIO 


and Income Patterns 


Postwar Cyclical Shifts in Output 


Recession Periods 


e Investment 





s National Produc 


Personal Consumption 


Private Investment 


Government Purchases 








EZ 


-10 


Gross National Produc 


4 Personal Consumption 


Private Investment 


4 Government Purchases 





Laitdiiatindial 


Department of Commer 


Recovery Periods 














Q 

















March 1959 


In some respects, the decline differed from the pattern of 
the 1953-54 cycle, when Government buying dropped most 
as defense expenditures were sharply curtailed. The decline 
in business investment was moderate, while consumer pur- 
chases showed very little change as taxes were cut and real 
income there by sustained. 

In the covery, from the second quarter of 1954 to the 
second quarter of 1955, national output at an annual rate 
2 billion (in 1957 prices). Consumer purchases 
investment each rose rapidly and extensively. 
purchasing continued to decline but at a much 


increased 
and pri 
Grove! 
slower rate 
In that eyele, consumer buying was maintained in the 
downtul and advanced quickly recovery Was 
ul det As +f 
irable goods was a feature of the recovery, and 
brought a flood of auto buying unequalled before or since. 
In the 1948—49 recession, when the Government programs 
( 3 expanded by foreign aid, and a large consume! 
backlog of durable goods demand still existed, the only 
Sigil | During 
hase, real consumer purchases and Government 
increased moderately. In the recovery period, 
tepped up their buying, and, with the turn- 
ntory policy, business investment also ad- 
ally 


of these 


once the 
matter of fact, consumer borrowing to 


pure his 


\ re rf 
re f 


ifiea occurred in business inventories. 


recessions turned out to be short and 


arked by broad governmental actions—som« 
nd some designed to have an anlic ye lical effect 
strength of consumer purchases, under thes 
ustaied personal income and the absence of 
had p olonged unemployment, had a stabilizing 
As will be developed, however, the 


ymposition of purchases among the various 


economy 
goods and services had noticeable and, in some 
mpacts on particular industries 


implied that the stabilizing influence of 

lerived its primary impetus from the consume! 

nae ated above, developments ine other private 
the Government played important roles in 

of his income. Nonetheless, the con- 
is overall propensity to consunn 


to be 


income. 


CONSUMPTION PATTERNS 


sumer pure hases are viewed in relation to total 
d output over the long-term, interesting patterns 
t. The accompanying chart brings out several 
yn the behavior of consumer spending in relation 

nd output, all expressed in constant dollars. 
f purchases to real disposable personal income 
iated within a relatively narrow range around a 
average in the 20 years prior to 1929, and again 
postwar period 1947-58. In the years of the 1930 
spending was naturally high from 
and in the war years such spending was 
by price controls and the limited availability of 
ods In other years, the most pronounced 
ons occurred in the 1921 recession and in the early 
s of abnormality in production and distribution 
of purchases to real gross national product 
teresting to note that in the 20-vear period before 
1929 onsumers took, on the average, 69 percent of the 
| output, with rather small fluctuations about this 
averag In World War I when the Government 
the consumer ratio dropped to 63 percent. During 
phase of the depression years, the ratio in- 


cdepresslol consumers’ 


omes, 


nationa 
needs 
increased 


the declining 


SURVEY OF CURRENT BUSINESS 19 


creased to a top of 80 percent, and in 1944 a low of less than 
50 percent was reached 

With the ending of the war, the consumers’ share of the 
national output increased rapidly and eventually stabilized 
around an average of 65 percent. The lower ratio for the 
postwar than the pre-1929 period reflects the relatively large 
national output absorbed by the Government in 
The 
substantial amount of consumption 
More than one-fifth of total output in 1958 was 
bought by Government, compared with an average of on 
tenth in the twenties 


share of 


recent years Government’s purchases include, of 


course, a coods and 


services 


Relation of consumption—investment 


Over the short-run, the 
and the phy sical volume ol plant ana equipment purchased 
of differing evchieal sensi 
where periods of 


compared there can be 


correlation between consumption 
by business is not close because 
Over the 


Cconomnie 


tivities longer run, howeve1 
high-level 
discerned some constaneyv in the 
fluctuates 

The chart on page 20 shows the ratio of consumer expendi 
tures to business plant and equipment purchases (GNP basis 
It isclear that both in the period prior to 


activity are 
level about which the ratio 


in constant dollars 
thie creat depression and in the current postwar pe riod this 
ratio has fluctuated around an average of 5 that is, for 
every dollar of plant and equipment acquired by business, 
consumers bought, on the average, about $5 of real goods 
and services There appears to have 
ipward or downward drift in this ratio over the long-term 


ibstantial 


been he 


period Over the short run the ratio does fluctuate sharply 


Shifts in consumption 


The consumer “Mix of goods and services has varied 


considerably over time, with significant shifts taking place 


among groups O© pure hases 


In LY5S personal consumpttol expe nditures totaled $291 





Personal Consumption in Constant Dollars — 
Ratios to Income and GNP 


Ratio 
1.25 [ 


Disposable Personal Income 


\ 


"i 


Gross National Product 


L Note: Based 1957 Dollars 
iy . a FUURUUEUTEUUEUSUCHUCETTTECUEECUTTETETEUTTODETETE 


1910 #15 20 25 30 «(35 40 45 50 55 


U. S. Department of Commerce, Office of Business Economics 














Hw) SURVEY OF CURRENT BUSINESS 


billion with personal in¢ e al the fourth 


quarter the sea na ad lal lit Ss rate ment of real disposable income per capita Bot! 
was at $296 bill f and expenditures per capita are still 2 ps 
further rise in the fi juarter of t eal e advan 1957 high 

from the recessi ow ol the tq The 
1958 followed a mor inl personal income ¢ 
from the peak 19 irri t! 


quarter of last year. <A similar pattern occurred 


chart on page 21 shows the 1958 d 
| nl hy majo! componel LS 
an four-fifths of income was spent for good 
Kxpe naditure ~ {ol v’oo0ds took half ol the nco 
Personal Consumption in Constant Dollars— ondurables accounting for 10 cents of 
~ Services tooK almost ol! 


Ratio to Plant and Equipment Investment mainder was divided between payments fo 


Che variations in tl 


noid ope 





1940 


Curret 


capita a 
I) 
! 


iIsposa 


capita « 
capita exXpe | 
third quarte! 
the recovers 


amounting 


Fable 1.—Personal Consumption | xpenditures 


| i Percentage of Disposable Personal Income, for Selected Years 





Total goods and services 
Durable goods 
Aut 
Fur 


Nondurable goods 


Other 











* Preliminary 
1. Includes dat 


Source: | De 





March 1959 


on current dollars, the fluctuations in the ratio of these 
expenditures to the total in the past 8 years have been some- 
what larger than in constant dollars, and the ratio currently 
is above that of 1929. 

The clothing and shoes portion of total purchases has 
clearly been declining in the postwar period—from 10 percent 
in 1947 to 8% percent in 1958. This compares with a ratio 
of 13% percent in 1929. On a current dollar basis, the 
proportion of clothing and shoes expenditures shows a some- 
what more pronounced drop in the postwar years than is 
the case in constant dollars. The nature of this relationship 
is brought out in a different manner in a later discussion. In 
the case of gasoline and oil purchases, the proportion of the 

shown a steady rise in the postwar years—from 2% 
percent 1947 to nearly 4 percent currently. 
In the durable croods categories, the proportion of auto- 
d parts purchases has shown marked fluctuations 
twar period, with the ratio to purchases of all goods 
es ranging from less than 4 percent in 1947 to more 
cent im 1955 In the 1957—58 recession, the ratio 
rom a high of 6.2 percent to a low of 4.5 percent. 
for housing and household operation services 
postwar rise—from 15 percent in 1947 to 18% 

1958. In contrast, purchases of transportation 

constant dollars) dropped from 4 percent in 1947 
reverting back to the percentage 


total has 


mobiles 


1 4 perce nt 
Q?Q 

the rapid expansion in the stock of many types 

durables, expenditures for the care and repau ol 

have shown a considerable expansion in recent 


957, the repair bill for automobiles, radios and 


SURVEY OF CURRENT BUSINESS 21 


television receivers, household appliances, and other house- 
furnishings amounted to $5 billion and on the basis of 
preliminary data this total was exceeded in 1958. In the 
past 10 years, these expenditures have risen steadily, with 
the current rate more than double that of 1947—a rise in 
excess of the increase in consumer income. Expenditures 
on radio and television repair showed the most marked 
expansion, increasing 3% times over the 10-year period 

It should be emphasized that within major groups the 
movements of the ratios for subgroups show, in many cases, 
a considerably mixed picture. To illustrate this point, in 
the case of transportation, the ratios for local transit and 
intercity railway and bus transportation have been steadily 
declining in the postwar period. On the other hand, travel 
by airlines and by automobile has been steadily rising 

In summary, while total consumer expenditures have borne 
a rather steady relation to income, aside from the depression 
and wartime periods, within this aggregate many categories 
shift in importance as consumers change their preferences 
or view their prospects differently. There is, of course, 
variation in the extent of stability associated with the degree 
of urgency of need. Also, for certain groups of items 
definite growth tendencies are dominant while others have 
become of lesser importanc e in the consumer budget, 


CONSUMPTION-INCOME RELATIONS 


The consumption-income relations will be viewed in this 
section through the use of correlation analysis The rela 
involve essentially an up-dating of 


tionships presented 


Use of the 1958 Personal Income Dollar 


Use of 
Income Dollar 


Nondurables 
40% 


Durables 
10% 
Total Personal 


Consumption 
5 ened 





Expenditures 


82% 


Services 


32% 


4 


Based on Total Personal Income 
in 1958 - $354 Billion 


mmerce, Office of Business Economics 


Purchases of 
Goods and Services 


Clothing 
& Shoes 
8% Food & Beverages 


and Tobacco 
29% 
Housing 
13% 


on ‘ x 
a Operon" scree 


nol % 
House” 6% ‘ atten 
ve 
« oe, 
Sf Sh 
ee o All Other 
+ » rt es vee 
x © * Oo 26% 
o ~ a7 
vy Pr 
& > & 
2° o 
° c 


Transportation a 


3% 


Based on Total Consumption Expenditures 
in 1958 - $291 Billion 





OF CURRENT BUSINESS 


Consumer Purchases Related to Income 
in Constant Dollars, 1920-58 


Durable Goods 


Goods and Services 


ton 1957 Dolien (ratio scole 











Nondurable Goods Services 


Dolian (ratio scole 


Goods —Billion 1957 


Nondurable 





similar material Although the analyses will be considet 

ularly to Incorpo 

made in thy 

gnalyses are p | | lice of B ( : 

nomics’ new dat heed relationships, which are of particular inter 
Ty 


dollars, it should be noted that in certai 


mn : 
may be a significant difference from. thi 
ncomMe-sensitivibs coefficients that 
aemal d to a | percent change in disposabl 
—are shown in table 3 for the prewar perio 


for the postwar period, in constant dollars for 


1 current dollars for more detailed sub 


Lid 





March 1959 


Some summary facts may first be noted: 

1. In real terms, total consumer purchases over the long- 
run period of the twenties and postwar vears have shown a 
close relat ionship to consumer income: a change of 10 percent 
in real income was associated on the average with a change 
of approximately 10 percent in real purchases. In periods 
of sharp cyclical changes in business, a variation of 10 per- 
cent in real income was associated on the average with a 
ge of 8 percent in real purchases. 
response of the major groups—durables, nondu- 
to income change over the long-run 

what occurred in the 1930 
depression. The secular tendency has been for real purchases 
ol lurable coods to show a moderate upward response rela- 


( hat 


2. Th 
rables. Al 
period of course differs from 


d services 


tive to 


response has been approximately equal al to 1 association 
business evele, however, durable- 


ncome, while for nondurable goods and services the 


During wings in the 
goods purchases in real terms have responded more intensely, 
rable goods rather moderately, and services have been 
sensitive to income changes 
subgroups of expenditures, there is a wide diversity 
of income response in all periods. In addition, purchases of 
lurable particularly automobiles, have shown wide 
fluctuations, often not directly related to the income flow, 


in the postwar vears 


oods 


Consumption-income patterns 


A ree) 


{ol some 


imination of past relationships provides the basis 
generalizations regarding the overall consumption- 
neome pattern The uppel left panel of the accompanying 
chart shows this pattern for the years 1920-58 with total 
consumption and income both in real terms. So far as the 
entire period since World Wat | is concerned, expenditures in 
lat Conseque ntly, it 


income show noticeable shifts 


lation or simple expressions such as ratios or linear 


i ot account for all of the « hanges, 
consumption income change is con- 
y different over long periods than during swings in 
The line on the chart represents a recres- 
high-level activity 
It mav be seen that the points for 
about this line 


wing about 1 percent. This relationship indicates 


response to 


ess cycle. 
ed to the 
postwar vears.* 


vears of the twenties 
] 
ears cluster closely the average 


i" thar response ol consumption to income change 


lable 2.—Distribution of Real Personal Consumption Expenditures | 


SURVEY OF CURRENT BUSINESS 


in years of rising, high level economic activity is such that 
a given percent change in real income is associated with a 
closely similar percentage change in consumption 

Two points may be made concerning this relation First 
in periods of brief and relatively small cyclical fluctuations, 
such as those of 1923-24, 1926-27. 1948-49, and 1953-54. the 
consumption-income pattern was approximately in line with 
the secular relationship shown on the chart 

Second, in the sharp evclical swings of 1929-37 and 1937 
38, with large-scale unemployment, the relationship shifted 
Both in the pronounced downswing and in the subsequent 
recovery, consumer demand exhibited a marked lag relative 
to the income advance 

All three major groups of expenditures show significant 
differences between the secular and evelical relationships ol 
consumption to income This may be seen from the other 
panels of the chart 

As would be expected the cyclical 
change is sharply pronounced In the durable voods group 
much less so in the nondurables, and even less so in the 
The respe tively 2.1 
0.7, and 0.5." 

In the case of durable coods the eve lical response has been 
small busines fluctuations 


response to income 


services income coefficients are 


sharp even in periods of relatively 
Such behavior results from the longer life of these goods and 
the flexibility of replacement, and from the use of credit 
as an important element of financing. Consumers are more 
willing to increase installment debt 
and are more reluctant to incur additional indebtedness when 


when income is rising 


income declines and prospects appeal less favorable Len 
likewise debt 
creation in good times. Purchases of nondurable goods and 
much less postponable smaller 


reaction to evclical changes in income 


ders are more agreeable to the process of 


services have shown a 


Real durable-goods purchase s show wide swings around the 


long term relation, which at times ar 
independent of income changes For example, the Korean 


vroods buving in YOO 


autonomous and quite 


war touched off a wave of durabl 
which brought purchases to a point considerably above the 
1951 and 1952 
tion restricted, such 


Again in 1955, the 


long-term relationship In the next 2 vears 
despite rising incomes but with prod 
purchases were cut. back severely 
unusually 
resulted in a bulge in durable 


1957, purchases fell back to the 


automobile purchasing 


1956 and 


favorable conditions for 
voods buving In 


long-term line Finally 


»y Major Groups of Goods and Services Based on Constant (1957) Dollars 





Total goods and services 100, 0 100, 0 


Dural oods 


Nondurable goods 





100, 0 100, 0 100, 0 on. { 1K ow 100, 0 100, 0 


13,3 12, ¢ 14,0 5 15.4 ; 14,0 12.9 








24 
adverse market con- 
g-term 


they were reduced sharply under 
ditions of 1958 toa po nt conside ADLY hye low hn ion 
relation. 

durable 
al ad services 


In contrast to the autonomous 


goods spending pure 


in constant dollar to income 
changes over the period imply means that 
consumers spend a high proportio their incomes at all 
times, but are able to supplement them by bor ing to a 


; 


nader certau cond business 


greater extent 
than at other time 
In the case of 
tions from the li 
which were tempo 
shortages In al 
close proportiol 
the long-term 
meome in consta 
sidering the close 
of nondurable go 
variations in 
offs f Lo the wide 


Analysis of special groups 


Data for the 1920 
categories of 
services. Ther 
of the more «ce 
Income change 
“elivity is contin 
alone Kon a 
income change 
prewar years 
chauracteristh 
hisny special inf 

It should alse 
involved 1th ahi 

nee the usual 
neome relati 
bare part Irom 


by il pel 


LicCOlle 
materially 
the time 
correlation be 


SURVEY OF CURRENT’ 


BUSINESS March 1959 
limitations of the sensitivity coefficients based on income 
alone, it is, nevertheless, of interest to examine the response 
of consumption of some of the more important categories 
of voods and services to income changes. 
Analyses involving the use of one factor 
considered as complete since other 


consumer it 


come—are not to be 


Food Expenditures Related to Incorne 
in Constant Dollars 


80 


70 


60 


50 


futomobiles highly volatile 


rr 5 uli pul 
lwtioOns I! 
ad postwal 
ted with ditlere 
+) period ot ce pre 
ol purchases ol automobiles and pa 
in constant dollars was nearly 3 
Is explained by the ré ady post po 
' and the reluctance of consume! 


of pronounced business declines, 


period of upswing automobile purchas¢ 


arply not 
with ie ted 


esult of rising Income 


illinet ess of co 





SURVEY OF CURRENT BUSINESS 


var period, aside from the early years when cars 
vely short supply, autos and parts purchases 
nly a moderate rise in relation to income. How- 
ir-to-year purchases in relation to income have 
swings due to temporary and unusual factors 


n 1950 purchases of autos and parts (in constant 


d 28 percent from 1949 whereas the real in- 
| percent This s} arper rise 1m purchases 

ts reflected, of course, the heavy buying 
break of Korean hostilities In 1955, due 
relating to more favorable credit terms and 
of cars and other mnovations, 


] 
itomobiles and parts again increased sub 
| 
le purchases of 20 percent occurred along 


to ICO! Finally m the L957 5S perro 
than | percent 


and household equipment 


ousehold equip 
close degree ol 


both the wal 


and postwar periods than has been t e case with automob 

and parts. In the postwar period the mcome-sensitis 

f the furniture and household equi rent rroup was | 
1 in the prewar vears of ¢ al variability Sp 

luctors affect yr LThes¢ pure hnases | past decade o 

included the meking up of the : vartime deficr 

houses, and hence furnishings, and the large incre: 

birth rate and in family formatior 

co cluded that the relation Lo 

persist im the future 


Food purchases 


Food pure 
High volumes 


ior 100 


real food « Xp 


tures 

to rise ovel 

However, in ¢ 

affected materially by the ay 
T 1 positive elatio 


Wc? aver 


lable 3.—Sensitivity | of Personal Consumption Expenditures to Changes in Disposable Personal Income 


ry 





Total personal ce 


Automobiles and parts 


Furniture and household equipment 


Other durable goods 


Clothing and shoes 


Food and alcoholic beverages 


C,asoline and oil! 
Tobacco products 


Other nondurable 


nsumption expenditures 


nsumption expenditures 


goods 





Household operation 
ble r 
WwW 
Telept 
1) 


Housing 
Personal services 
} 


Barber 


Recreation 
"I : 


Transportation 
\ piler 


Personal business 
Private education and research 


Religious and welfare activities 











H -ENT BUSINESS 
for every 10 pert This loss has ave raged 1.3 percent per 
clot! mig chart shows the 


plained by the pal el of the 


for higher quali more hig essed { ( c clothing expenditures to income change 
the frozen food | 1estion of what is a ( stant dollars, while the lower panel shows 
here as el ewherse , ‘ ’ ‘ " to he tion in such pur hases over the vears obtal 
constantly bor \ ot ¢ il allowance for the ¢ ffect of real Income on 
consumption or 1 ove 1.e., dividing the act ial purchases by 
income line of relationship The final 
about the trend line in the lower panel ar 


T:; — Real Perso I Cons tion I enditures and Disposable 
seaeade cetee . ory mem oie “a a ' for the entire period of years the auverns 
Personal Income 1920—58 
the total relationship heing 2 percent 


deviation of less thar 5 percent occurri 


Gasoline and oil up 


asoline and oil illustrate 


of that for clothing and shoe 





i! ehart portravs th 


accompal | 
I ved As 1s shown 1n the upper panel 
what lowe! response ol these purchases 
than is the case fol clothing Here the 


that other factors ay req ial, for every 


real incomes there associated a H-perce 
purchases of gasoline an il a rather mod 
However, other fa rs tht » resulted 
n these purchast after taking into § 
e. As shown in the lower panel 
line purchase s has averaged 3 per 


e for income cha eC It is this 


accounted for cont nued imereases 
i! ssionary periods ol 
at times wit 
ior examptl 


percent al 


Housing and household operation 


\ indicated earlier consumer purchase 

nstant prices have comprised an approx 

are of total real consumption over the long 
rice dite re ntials between services and al 


relation 1s less close in current dollars 





used considerabl 


tth 


groups, consumers have 
types ot services p irchased so 
apparent. 
Pr rhnaps the most striking expansio 
Actually, co ant-dollar expenditures for food of services purchased occurred in 

as a percent of e tended tf il f 9 ITTOW ana household operation as shown I! 
range 22 to 24 ee] ) " | og In the 1929-40 depression period these 
only during { r iT ‘ f r ‘ r’. only il moderaté response to mcome chal cr¢ 
In ‘the last 4 ( ) LQ-percent change 1n real income Was asso¢ 
been around 22 1 age with a 5-perce it change In real pure hase 

pansion im pop ilation, the steady ere 
Relative dec line , y i s and hous holds the mereas 

mn wnership and other factors 

Clothing pu new market in the postwa 

sistent deel 
the experienc 
indicates tha 
more clothu 
real mconn oO 
actual pureha 
mcome relatio 
have produced 


purchases relat 


&. Appr 





March 1959 SURVEY OF CURRENT BUSINESS 


Differential Trends of Consumer Expenditures Relative to Income 


CLOTHING and SHOES Expenditures GASOLINE and OIL Expenditures 
in Constant Dollars in Constant Dollars 


Expenditures moderately sensitive to Expenditures not quite so sensitive 
income change .. . to income change 





aad | ns 


} 
10 


30 








e and Oi! Expenditures—Billior 


7aS0lir 


Disposable Personal Income—Billion | 


and after allowance for income effects 
the trend has been declining 


140 Disposable Personal 


and the net trend has been up 


180 [ 


BO Lists iiss isi sists triisiiis AAs Te 160 + 
1930 35 40 45 50 55 60 [ 
140 | 


120 } 

s have increased on an average of 14 percent 
cent rise in real income. 

household operation group, nearly all major 

ave shown strong growth. For example, in the 

he average annual rate of increase of expendi 

Cs electricity, ras, and telephone has been 

about 10 percent. Purchases of these utilities 

ecelerated by the large postwar growth in home 

ppliances, in the use of gas for heating, and the 

e number of telephones. Purchases of domestic 

followed a contrary course, showing a general 

the postwar period due in part to the easing 

of household work through the use of home 

din part to the limited availability of hous« hold | 
: : 40 Lessig i 

¢ and household operation expenditures com- 193035 a a nn - 

t half of the total purchases of serv ices, they con- 

tantly to the strong long-term growth of total 


Net Regression CD—Perce 


m * 


U. S. Department of Commerce, Office of 





Ig SURVEY OF CURRENT BUSINESS 
service the postwal period in line wit 


Consumer Expenditures for Services in Constant iets oe ey Ee, coduded te 


services, the resulting series shows a notab 


Dollars Related to Income, 1929-58 res nt agericonap tn s 
o income in bDOTn ne prewar an postwal 
change of 10 percent in real incom 
1 on the average by a cha 


HOUSING and HOUSEHOLD OPERATION relation to income vas accompanied on th 
I ase I vices other lan housing 
has shown a marked shift from prewar to postwar... oe ee ther than housing 


pe riods il 


70 [ _ I 1 dhnanagear within this “all othe 
Ow r, have reflected contrasting tre! 

I ponses to income changes For example 

60 | ] of recreation services have fluctuated with 

the postwar years he fact tl 


line with Income in the postw: 


wdmissions to 


( line lI 


whereas ALL OTHER SERVICES have shown 
a rather constant relation to income 


70 [— 
60 | 


Equations for Consumption-Income Relationships 





50 | 


Dollars (ratio 


1957 


~Billior 


vices 





6 S. Department of 





Monthly BUSINESS STATISTIC 


A hw 





1957 edition of BusiINgEss STAT! iennial Statistical Supplement 
monthly (or quarterly) data for the ! 53 through 1956 and 
far as also provides a description of each serie 


tly revised since publication of 1957 Br 
revisions for 1956 issued toc 


yurces of month 


I isterish *) and a 


f 


the aforementionet 
issue. Except as otherwis« it I terms ‘‘unadjusted 


monthly SURVEY 
and ‘adj 1” ref vdijustment for 


vernment agencies al N ( I ‘ an iay be reprinted yurces are provided 
mpilers, and 


Unless otherwise stated, statistics through 1956 and 
descriptive otes are shown in the 1957 edition of 
BUSINESS STATISTICS 


GENERAL BUSINESS INDICATORS 


NATIONAL INCOME AND PRODUCT 





ludes and other fo 
to $4.6 billion 
1958 SURVEY J Include 
ember 1958 SURVEY 
ynal product above 





CURRENT BUSINESS 


Unless otherwise stated. statistics through 1956 and 
descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTI¢ 


GENERAL BUSINESS INDICATORS—Continued 


NEW PLANT AND EQUIPMENT 
EXPENDITURI 


FARM INCOME AND MARKETINGS 


INDUSTRIAL PRODUCTION 
/ 


ites for April-June 
RVEY 


rior to 1956 are 
18 of the July 1958 





SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


GENERAL BUSINESS 


INDUSTRIAL PRODUCTION ~“— Continued 


tir 


NSUMER DURABLES OUTPUT 














BUSINESS SALES AND INVENTORIES 











RRENT BUSINESS 


U nicss otherwise state: 
descriptive notes are show 
BUSINESS STATISTI« 


GENERAL BUSINESS INDICATOR S—Continued 


MANUFACTURER al 
A 


ND OR! i 





less other wis tated, statistics through 1956 and 
descriptiv xtes are shown in the 1957 editien of 


BUSINESS STATISTICS 


GENERAL BUSINESS INDICATOR S—Continued 


MANUFACTURERS’ SALES, INVENTORIES 
AND ORDERS ~ Continued 


BUSINESS INCORPORATIONS 


INDUSTRIAL AND COMMERCIAL FAILURES 


PRI 





COMMODITY PRICES 


CES RECEIVED AND PAID BY FARMERS 





NT BUSINESS 


Unless otherwise stated, stat 
descriptive notes are showr 


BUSINESS STATISTIC 


COMMODITY PRICES—Continued 


WHOLESALE PRICI 


De 





SURVEY OF CURRENT BUSINESS 


statistics through 1956 and 
1957 edition of 


Uniess otherwise stated 
descriptive notes are shown in the 
BUSINESS STATISTICS 


PURCHASING POWER OF THE DOLLAR 





CONSTRUCTION AND REAL ESTATE 


CONSTRUCTION ACTIVITY 


CONTRACT AWARDS 





NEW DWELLING UNITS 








RRENT BUSINESS 


( niess otherwise stat 


descriptive notes are ‘ 
BUSINESS STATISTIK 


CONSTRUCTION AND REAL ESTATE—Continued 


CONSTRUCTIE 


CONSTRUE 


DOVIESTIC TRADE 





SURVEY OF CURRENT BUSINESS 


Uniess othe stated. statistics through 1956 end 
descriptiv s are shown in the 1957 edition of 
BUSINESS STATISTICS 


ADVERTISING— Continued 


PERSONAL CONSUMPTION EXPENDITURES 


RETAIL TRADI 











S-10 SURVEY OF CURRENT BUSINESS 


Uniess otherwise state: 
descriptive notes are shown in the < tier 
BUSINESS STAT! lw | 


DOMESTIC TRADE—Continued 


RETAIL TRADE ¢ 





SURVEY OF CURRENT BUSINESS 
Unless otherwise stated, statistics througk 1956 and 


descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


| 


April | May June Ju 


Janu | Febru 
ary ary 


DOMESTIC TRADE—Continued 


RETAIL TRADE— Continued 


WHOLESALE TRADE! 





EMPLOYMENT AND POPUI 


POPULATION 


EMPLOYMENT 








CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
deacriptive notes are shown in the ! f 


BUSINESS STATISTI¢ 


editior 


EMIPLOYMIENT AND POPU LATION—Continued 


EMPLOYMEN 


LABOR CONDITIONS 





SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 


descriptive notes are shown in the 1957 edition of 


BUSINESS rATISTIcs 
EMPLOYMENT AND POPULATION—Continued 


LABOR CONDITIONS ~ Continued 


Cor 








S-14 | * CURRENT BUSINESS 


Unless otherwise state« 
descriptive notes are 


BUSINESS STATIS 


EMIPLOYMIENT AND POPULATION—Continued 


LABOR CONDITIO 





SURVEY OF CURRENT BUSINESS 


Uniess otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


EVIPLOYMIENT AND POPU LATION—Continued 


WAGES —- Continued 











S-16 iVE CURRENT BUSINESS 


Uniess otherwise stat 
descriptive notes are show 


BUSINESS STATISTIC 


FINANCE 


CONSUMER CREDIT 
(Short- and Intermediat 





March 1959 SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and | = ’ 
descriptive notes are shown in the 1957 edition of : | Sete. | | le os 
BUSINESS STATISTICS — . March April May June ) | October 


| | 


FINANG _ ‘ontinued 


CONSUMER CREDIT? Continued 
(Short- and Intermediate-term) 


FEDERAL GOVERNMENT FINANCE 








RRENT BUSINESS 


Unless otherwise stated tatint through |! und 


descriptive notes are shown in the I edition of 


BUSINESS STATISTIC 


MONETARY rATISTICS 





SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


PROFITS AND DIVIDENDS (QUARTERLY 


SECURITIES ISSUED 


SECURITY MARKETS 


Brokers’ Balances (N. Y. S. E. Members 
Carrying Margin Accounts 


Bonds 








S-20 


SURVEY OF CURRENT BUSINESS 


March 1959 
Unless otherwise stated, statistics through 1956 
descriptive notes are shown in the 195 
BUSINESS STATISTICS 


and 
edition of 


SECURITY MARKETS 
Bonds —Cor 


Continued 


inued 








March 1959 SURVEY OF CURRENT 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of . | 
BUSINESS STATISTICS ao : ' March Ma J 


INTERNATIONAL TRANSACTIONS O} 


BALANCE OF PAYMENTS (QUARTERLY 


FORFIGN TRADI 


Indexes 


BUSINESS 


| 


July | A 


| 


* THE UNITED 








RVEY OF CURRENT BUSINESS 


Unless other wine uted, statistics through 195 
descriptive note» are shown in the 1957 edition 
BUSINESS STATISTICS 


INTERNATIONAL TRANSACTIONS OF THE UNITED STATES—Continued 


FOREIGN TRADE. ( 
Value Cor 





Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 
BUSINESS STATISTICS 


SURVEY OF CURRENT BUSINESS 


edition of 


Airlines 


TRANSPORTATION AND COMMUNICATIONS 
rRANSPORTATION 


Express Operations 
cal Transit Lines 


Motor Carriers (Intercity 


Class I Railways 





Waterway Traffic 








S-24 . RRENT BUSINESS 


Unless otherwise stated 
descriptive notes are how 


BUSINESS STATISTICS } 


PRANSPORTATION AND COMMUNICATION S—Continued 


rRANSPORTATIO 


AND ALLIED PRODUCTS 





SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of , } 
BUSINESS STATISTICS = . Mar Ay 


FERTILIZERS 


MISCELLANEOUS 


FATS, OILS, OILSEEDS, AND BYPRODUCTS 

















S-26 


Unless other wise stated 
descriptive notes are shown 
BUSINESS STATISTI¢ 


FATS, OU 


horter 
Product 


tock 


PAINTS, VARNISH, AND LACQUER 


t 


SYNTHETIC PLASTICS AND RESIN 
MATERIAI 


ELECTRIC POWER 


Rn 

treet 
Other 
Interde 
Revenue fr 
Electric I 


Manufacture 


Re one 

Industr 

* Rey 
material 

tRevisi 
stocks (Mar 
January-August 
p. 20 of the Mar 

§ Data are | 
published later 

o'Totals includ 


‘URRENT BUSINESS 


CHEMI 


ALS AND ALLIED PRODUCTS—Continued 


ELECTRIC POWER AND GAS 














SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


Janu 
ary 


GAS— Continued 





ALCOHOLIC BEVERAGES 


it w eries 


DAIRY PRODUCTS 





tion of wine 
for the periods 


condensed milk an 





S-28 SURVEY OF CURRENT BUSINESS 


Uniess otherwise stated, statistics throug! 
descriptive notes are shown in the 195 
BUSINESS STATISTICS 


FOODSTUFFS AND TOBACCO—Continued 


FRUITS AND VEGETABLES 


GRAIN AND GRAIN PRODUCTS 





SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of . | ’ | } 
BUSINESS STATISTICS wr 


| 


| August | 


FOODSTUFFS AND TOBACCO—Continued 


GRAIN AND GRAIN PRODUCTS— Continued 


ks (100 Ib 


rt tons 


us. of bu 


f sacks (100 It 


LIVESTOCK 


POULTRY AND EGGS 


MISCELLANEOUS FOOD PRODUCTS 








SURVEY OF CURRENT BUSINESS 


S-30 


is 
statistic through 1956 and 


edition of 
: Ma June | Ju 


Unless otherwise stated 
deacriptive notes are shown in the 195 
BUSINESS STATISTICS 


FOODSTUFFS AND TOBACCO—Continued 


MISCELLANEOUS FOOD PRODUCTS—Cor 


Refined 
Fr 
Price 
Raw, v 
Refir 


rOBACCO 
Leal 
Productior 
Stock leale 
total 
Domest 
( igar le if 
Alr-cured 
laneou 
Foreign gro 
Cigar leaf 
Cigarette tot 
Exports, inclu 
Import ‘ 
Manufactured 
Productior 
Chewing, 
Smoking 
Snuff 
Consum] 


Cc , 
Manufactured t 
Exports, cigarett 
Price, cigarette 


saler and jobber 


LEATHER DUCTS 


HIDES AND SKINS 


Exports:* 


sue 

Calf and 
Cattle 
Import 


LEATHER 





* Revised 

*New series ) 
ft , 

§Price for f the Census 





March 1959 SURVEY OF CURRENT BUSINESS 


a | o5 
Unless otherwise stated, statistics through 1956 and | ae 
descriptive notes are shown in the 1957 edition of | ;,_,,, | Febru- 
BUSINESS STATISTICS = ~ 


2 , | mist | Septem- | P ). 
ary oe March | A pril | May | June | July August os Octoder | 


LEATHER AND PRODUCTS—Continued 


LEATHER MANUFACTURES | | | | | | 


thous. of pairs 48, 910 51, 955 
shoes, except athletic, 
thous. of pairs 9,1: 44, 678 


do 9, 335 &, 310 ; : 7, 647 
do 2 2, 073 : 753 1, 805 
do 26, 6: 24, 594 25, 77 7 20, 022 
do 7, 52 6, 479 ‘ 4, O45 


do 3, 5! 3, 222 


do : 3, 543 4, 57 5,614 
do K 35 : g 433 
do 337 
do 
factory 
is, dress, cattle hide upper, | 
947-49= 100 y 124.4 124.4 
ie upper, Goodyear welt 
1947-49= 100 3 133.9 133.9 133. 9 133.9 


n quality. ..._.do 9. § 119. 5 119. 5 118.7 118.7 118.7 











LUMBER—ALL TYPES} 


Manufacturers Association 
mil. bd. ft 
do 
do 
do 
do 


do r1,996 | °1,805] * 2, BS f r 2, 441 


do 3, 5 < | < Y 3, 463 
do____| 53 | 6, 3, 087 | 7 r 5,838 | * 5,743 


ucts M bd. ft ; ? 7,785 | 62 
roducts_. we do 7, 507 247, | 258, 85 , 069 | 313, 


SOFTWOODS! 


549 
492 
633 | 
564 
1, 053 1, 
19, 204 20, 636 2 | 2 7 766 18, 424 
8, 167 10, 270 : } 8 0 
11, 037 10, 369 : 352 | 9, 864 








76. 201 | 75. 75. f 76.073 | 7! | 75.956 | 180. 577 





117.674 | 114 


r 486 | 
151 
do | rol ’r 408 
do r 55 r 483 
neentration yards, end of 

mil. bd. ft 2 2, O18 
M bd. ft 5, 87 6, 447 

lo 

do 


t. L 
per M bd. ft 75. 833 74. 643 
wf &" | 
per M bd. ft ‘ 142. 352 


bd. ft 55 304 
do 334 
do r ’ Al 
do r 550 r 554 
do ¢ 

3 common 


per M bd. ft 


HARDWOOD FLOORING AND PLYWOOD 


2,750 | 


13, 100 | 


2, 625 


end of month 2 { 11, 125 


70, 590 72 O68 
do } 7 3, 7% 45, 822 5, < 56, 108 
do 9, 5 66, 416 71, 535 73, 987 
do q 67, 033 
of month do : 103, 716 | 101, 086 
packaging), qtrly. total: 
sq. ft., surface measure 175, 231 


Not entirely comparable with earlier data 
n for January 1955-July 1957 will be shown later 
roduction, shipments, stocks, and orders for 1955-1957 will be shown later; those for plywood shipments (3d quarter 1953-4th 
I ply 1 








SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


METALS AND MANUFACTI 


Foreign trade 
Iron and steel 1 
Exports, total 
crap} 
Imports 
Scrap 


Productior 


Export 

Stocks, t 
At mine 
At furt 
Atl 


Manganese (n 
f 


Pig Iron and Iron Manufactures 


Pig tron 
Production 


Consumpt 
Stock 


Price 
Compo 
Basic 
Foundry 

Castings, g 

Orders, ur 


Shipment 
For sal 
Casting 
Order u 
hipment 
For sale 
Steel, Crude and Semimanufactures 
l ingots and ste« 
Productior 
Percent 


Steel, Manufactured Products 
Barrels at 
Order 
Shipmer 
Stock 
me 





March 1959 SURVEY OF CURRENT BUSINESS 


. » 95 

Unless otherwise stated, statistics through 1956 and 1958 
descriptive notes are shown in the 1957 edition of | 5... | Febru | | | | Septem- | 
BUSINESS STATISTICS oi ie March | A pril May June July | August | —— 


METALS AND MANI FACTURES—Continued 


IRON AND STEEL— Continued 


Steel, Manufactured Products— Continued 


4 
do 


Back] 1 of nthf do 


NONFERROUS METALS AND PRODUCTS 


short tons 139,910 | 121,980 | 134,019 327 | 718, 541 25, 416 
d 28, 565 23, 095 24, 57% 4 " 0 697 | BW, 803 22, SU2 
| 
18, $2¢ 17, 343 24, 949 an 4 5 27, 306 
2, 009 1, 603 «, Olt l : 
rt tons 441 189, 999 
lol. per Ib 2 2810 2810 


251.4 
190. 1 
100.8 
my) & 


82, 048 
109, 100 
78, 455 


30, 645 


38 
7, 484 
2469 

422 


187 








S-34 


Unless otherwise stated, statistics through 1956 and 


descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


HEATING APPARATUS, EXCEPT ELECTRIC 
Radiators and cor 
Shipments 
Stocks, end ¢ 
Oil burners 
Shipments 
Stocks, end of me 
and range 
Shipments, tota 
Coal and wood 
Gas (incl, t 


K erosene 


domes 
and wor 


Stoves 
Coal 
Cias@ 
Kerosene, gasol 


Warm-alr furr 
hipments, t« 


ace 
tal@ 
Gas 
Ol 
Solid fuel 
Water heaters, gas, st 
MACHINERY 


f 


AND APPARATUS 
Blowers, fans 

Blowers an 

Unit-heater ¢ t 
Foundry equipment (1 


Furnaces, industrial 
Electric processing 
Fuel-fired (except f 

Industrial trucks (electr 
Hand (motorized 
Rider-type 

Industrial truck 
shipments 

Machine tools (1 
New orders (net), tota 

Domesti 
Shipments 
Domest 
Estimated backl 


total 


Other machinery and « 
Construction mact 


Tractors, 

Tractors, wt 

Tractor shovel } 
and track lay 


track 


Farm machine 
excluding tractor 
Tractors, wheel 
highway ty 
Pumps (steam, 
orders 
EQUIPMENT 


ELECTRICAI 


Batteries (automot 


Household electr 
Range incl 


Refrigeratior 
Vacuum cleaner 


Washers, 
Kadio 
Television 


ale 
ets, prod 
et 
Insulating materia 
Insulating mater 


Vulcanized fiber pr 
Steel conduit 
Motors and genera 
New orders, inds 
Polyphase t 
New order 
Billing 
Direct current 1 
New order 


Billings 


t 


awl 
1957 


R 
qu 


@ Revision 


evi 
irter 


4th 

heaters were le 
tRevised oft 
note in Septer 
*New serie 


SUSINESS 


SURVEY OF CURRENT BUSINESS 


Mar n | A pril May 


| 


October 


I 
m- 


June 


METALS AND MANUFACTI RES—Continued 


1 


103, 852 
43, 818 
5, 599 


224 691 


100,103 
40, 104 

5, 147 
254, 743 


30, 113 
20, 308 


t 
3, etc 


account for 


Data for March, J 


from 16 to 24 cor 











March 1959 SURVEY OF CURRENT BUSINESS 
RS aioe ween —_ weet 1959 


Unless otherwise stated, statistics through 1956 and — 
descriptive notes are shown in the 1957 edition of | j.ny. Febru- | ; — 
BUSINESS STATISTICS ee ary March April lay June July August 


Novem Febru 


j 
Septem-| October 
. ry 


ber 





~ PETROLEUM. COAL, AND PRODUCTS 
i rn — eee 





COAL 
thous. of short tons 2, 197 , 783 1, 1 1, 571 
orage yards, end of mo..do 275 283 
do 22! y 137 117 | 
29. 14 | 28. 21 


dol. per short ton 
15. 512 13. 279 


car at mine do 
Bituminou 

Product thous. of short tons .e 31, 4 31, 930 29, 940 
Industrial nsulmy n and retail deliveries, totalf 
thous. of short tons 

Indus nsum ptic otal §f do 
Electric v util do 3, 352 13,165 | 11,200 
Oven-coke do 6, 7! 5, 446 
ri) 
SRS 
629 


32, 319 27, 130 


28,692 | 24, 932 


Beet 


industries § 


i ass I 
Bunker fuel (foreign and lake vessel) § do 
Retail deliver o other consumers § do 
retail dealers’, end of month, 
thous. of short tons 70, 922 
do 2 70. 409 7 
do 707 45, 055 5 7 ; 3 47, 200 
do 3, 217 11, 906 l 5 , 10, 040 
540) 
1,003 


Stocks, 
tot 


do . 5 ‘RY 
do 1, 364 1, 128 
do 12, 072 2 11, 141 7 A I ; 10, 840 
do 655 6 4i4 


do 738 513 | f 927 


do 4, 104 2, 93: 3. 629 
dol. per short ton 16. 62 16. 66 
5. 561 


use, f. o. b. car at mine..do 5. 539 | 


izes, f. o. b. car at mine do 7. 709 7 7. 709 


COKE 
Beehivef thous. of short tons_.) 
Over byprodu do | 
Petroleum coke do 
Stocks, end ofr 
Oven-coke plants, total . do 
do 
do 
Petroleun do 
Exports do 
oven foundry cok merchant plants), f. 0. b 
4 dol. per short ton. 


A ‘ 
A 


AND PRODUCTS 


number 2, 572 ’ 1, 704 2 2, 160 

thous. of bbl ( i 194, 472 193, 215 
percent of capacity 5 S 82 
thous. of bbl 228, 050 | 215 229, 754 


do... 285, 278, 534 263, 105 

do { a 7 56 2, « 

do }, 877 | 179, 464 9, sl, 37% , 037 fi 160, 914 
do 21, 514 y y f 20, 881 


..do S38 x K 3 170 
do 34, 2 4 5 32, 406 i, ‘ 5 32, 056 K 33, (4 
dol. per bbl 7 3. 07 “ 7 7 3. 07 3. 07 


thous. of bbl 


do 


do 75 7 7 7 Ro. 1 
do ‘ 4 5, OWE 7,97 61, 589 
do . 57 1. 43¢ 

do 7 2. Mt 
2 fuel) ..dol. per gal 093 
dol. per bbl 


thous. of bbl 
do 17, 459 
do 23, 073 
do 45 
New York Harbor 
dol. per gal 110 104 OWS Ovs 101 104 104 
Revision for December 1957, 7,834,000 barrels 
later for indicated items as follows: Bituminous-coal consumption (January- August 1957 
| wells completed, crude production, and refined petroleum products January-September 1957 
nsumption, retail deliveries, total industrial and retail stocks, and for the indicated components have been revised to! venchmarks; bunker fuel figure 
visions for consumption and retail deliveries are available on annual basis fr 1933 forward and on monthly basis beginn January 1954; revisions f 





bituminous stocks (Februar and yber 1957 beehive- 


19 urlier figures for affected items not strictly comparable 9 Includes nonmarketable catalyst coke 


averages of weekly quotations from Steet magazine); data prior to May 1957 w ill be shown later 





Unless otherwise stated, statistice through 1956 and 
descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


PETROLEUM, COAL, 
PETROLEUM AND PRODUCTS— Ce 
Refined petroleur 
Lubricant 


Product 


Domesti« 


PULP, PAPER, 


PULPWOOD AND WASTE PAPER 


WOOD PULP 


PAPER AND PAPER PRODU(¢ 


‘URRENT BUSINESS 


AND PRINTING 








Marcel 


1959 





March 1959 SURVEY OF CURRENT BUSINESS 


Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of Jans | Febru- | | 
BUSINESS STATISTICS er | nd March Apri 


PULP, PAPER, AND PRINTING—Continued 


PAPER AND PAPER PRODUCTS.-Continued 
er, newsprint, and par rboard 
ociation) :§ 
ous. of short tons 
do 
do 
do 


do 


do 
do 
do 
do 


do 


do 
do 
do 
lo 
English 


per 100 It 


of short tons 


PRINTING 





RUBBER 


rIRES AND TUBES 








S-38 , ‘ CURRENT BUSINESS March 1959 


c 


Unless otherwise stated, statistics through 1956 and 
deacriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


G 


PORTLAND CEMENT 
Production, finished c« 
Percent of capacity 
Shipments, finished cx 
Stocks, end of mont! 
Finished 
Clinker 


CLAY PRODUCTS 


Brick, unglazed (cor 
Productionda 
Shipment 
Price, wholesale, cx 


Clay sewer pipe and fit 
Production 
Shipment 

Structural tile, ung! 
Production 
Shipment 








GLASS AND GLASS PRODUCTS 


Flat glass, nifr hipr 6s 
Sheet (window 
Plate and other fl 


Glass container 
Production 


Shipments, dome 


General-ise food 
Narrow-neck foc 
Wide-mouth food 


plasse ind f 


Beverage 

Beer botth 
Liquor ar 
Medicinal 
Chemical 
Dairy pre 








Stocks, end oft 


GYPSUM AND PRODUCTS 


Crude gyp 
Import 
Productior 


ilcined, pre 


EXTILE PRODUCTS 





Ce 


March 


1959 


SURVEY OF CURRENT BUSINESS 





Unless otherwise stated, statistics through 1956 and 
descriptive notes are shown in the 1957 edition of Jant 
BUSINESS STATISTICS | ary 


March June July 


1- Febru- | 
ary | 


April | May | 





y TEXTILE PRODUCTS—Continued 





| 
= ) Septem 
August | ber 


COTTON 


Cotton (exclusive of 
Production 
Ginnings$ thous. of running bales 
Crop estimate, equivalent 500-lb. bales 
thous. of bales 
Consumptior bales 
Stocks in the ted States, end of month, 
total4 thous, of bales 
Dome do 
On farms a do 
Public r 12, 160 
Consur r 1,699 
Foreigt tton, = - ‘ ’ 53 


linters 


2 10, 630 


121 
1,262 


Export 

Import 

Prices (fa erican upland 

Price c e, middling 1, average 14 markets 
cents per It 


516, 805 
6, 418 
e 


4 


ttor 
ir thous. of bales 
do 


do 
FACTURE 


ods over 12 inches in width, 
mil, of linear yd 
thous. of sq. yd 


do 


cents per Ib 
yd_.cents per yd 
. do 
48 x 44-48 a 
cone r tubes 


Co 


MANMADE FIBERS AND MANUFACTURES 


wool 


639, 471 


O86 
032 
738 
517 
728 


54 


449, 626 


2, 276 
24.9 


34.6 


91 


45, 246 | 
11,178 | 
23. 26 


36.4 
15.1 


v6 


959 | 


2, 341 
5,043 
11, 860 


23.11 


$729,955 600, 256 
10, 661 
10, 620 


403 


500, 932 
1,812 


213 2, 627 


595, 408 | $613,950 767 | 647, 804 
18, 410 
18, 308 
0,710 
7 99} 
1,377 
101 
433, 434 469, O11 211, 910 

1,974 : ty 23, 400 


2, 108 
43, 5) 39, 100 
10, 350 11, 419 


22. 24 
v4 
l ‘ 
14.8 


j 
| October 


Novem 


ber 


Decem 
ber 





Janu 
ary 


Febru 
ary 





S—40 SURVEY OF CURRENT BUSINESS 


Unless otherwise stated. statistics through |! and 


descriptive notes are shown in the 1957 edition of 
BUSINESS STATISTICS 


TEXTILE PRODUCTS—Continued 


WOOL AND MANUFACTURES 





TRANSPORTATION EQUIPMENT 


AIRCRAFT 


MOTOR VEHICLES 


RAILROAD EQUIPMENT 


producti 











Sections 
General 
Cormzrr 
Constr 
Dor 


Ston: 
Te - 
Trans; 


Advert 
Agricult 
Agrict 
Aircraft 
Airline 
Alcoh« 
Alcot 
Alumir 
Appare 
Asphalt 
Autom 
Bakery 
Balan 
Bankin 
Barley 


Barrels a: 


Batter; 
Beef a 
Bevers 
Biast f 
Blowe 
Bonds 
vields 
Book fr 
Brass 
Brick 
Brokers 
Builc 
Buildi 
Busines 


Business sa 


Butter 


Cans ( 
Carlos 
Cattle a 
Cemen 
Cereal a 
Chair 
ort 
Cheese 
Cher 
Cigaret 
Civilia 
Clay | 
Coal 
Cocoa 
Coffe 
Coke 
Com: 


my esphalt and far 


Pages marked S 


by y general subject: 





yusiness 
lity prices.... ....-.<sesnssssbeee 

on and real estate. 

ped ag - 


ent and populetion 


2 and glass products. 38 
lucts. winidawiniinmeaaaed Gan 


tation equipment 


2, 3, 6, 8, 9, 10, 12, 13, 14, 15, 38 
ucts... 36 


3, 8, 9, 12, 13, 14, 15, 16, 17, 22, 40 
-. 2,12, 13, 14,15 
6 21 


a 


rporations (new), failures 
3 and inventories 


closures, 


lves - 
concrete ‘products 


6, 8, 38 
6, 12, 7 14,15 
and 1 


c sales, firms with 4 or more 


res - eee eee ee 


10 
‘ - 27 
_ 2, 3, 4, 6, 12, 13, 14, 15, 19, 22, 24 

6, 36 


t, hours, earnings, wage rates... 


and roade 
uction, dollar value_. 


C inden ateenwé 


: (see Consumer price index 
7 end manufactures 
pad = meal, ofl......... peice iy 
and intermediate-term___ enikhes 


natural gas. 


ekly and hourly 
irinking places 


l equip 
estimates and indexes. 
Service activities... 
struction 
United States Government... .-. 


25 
Iso individual | commodities). --- 21, = 


ns 





@reanen. ......- witwqroowamense Fe 4 
activities <2 22222=22. mig, 














olediel alalae, 








oOo00n 








QOo000anH 


$s, 
2, 
- 
9, 
impute (ace also individual mm 21, 


— 
ese SSERSa08 











is 


16 
Inventories, man bi ome and trade... eoeaadh 
fron and steel, crude and 





Leather and products. - - 
Es dia aw ees -+2<smsic on a 
Livestock 4 aad 























INDEX TO MONTHLY BUSINESS STATISTICS, Pages S1-S40 











- 





12, 13, 14, 15, 





SafSBiSSaaus 353 


3, 
2, il, 12, 13, 14, 15, 19, 40 
local) and bus lines ~ame 2a 88, 14, 18, 33 





Roofing and siding, asphalt 
2, 3,4, 6, 12, 13, 14, 15, 22, 37 








Tin 
Tires and inner tubes __ 
Tobacco and manufactures. 
3, 4, 5, 6, & 12, 18, 14, 15, 22, 30 


Rug ates —...-..- 


and compensation. 4 

States Government bo bonds... 16,17, 18, 18, 20 
United States Governmen 7 
Utilities. 2, 6, 7. 11, 13, 14, 15, 19, 20, 26, 27 





2, 5, 6, 22, 39, 40 
ace snsilibins 33 











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WASHINGTON 25, D.c. 


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Balance of 
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» STATISTICAL SUPPLEMENT 


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DEPARTMENT OF COMMERCE 


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OS eee oe 


THIS 1958 VOLUME—191 pages, conveniently indexed—is available from the Superintendent of Documents, U.S. Government 
Printing Office, Washington 25, D.C., as well as all Field Offices of the U.S. Department of Commerce. Price $1.00