Evening star., 1936-12-31
GENERAL ACTIVITY
GAINS 18PER CENT
Expansion Largely Centers
Among Durable Goods
Industries in 1886.
BY STANLEY N. SHAW,
Standard Statistics Co, Inc.

The most significant feature Of the
lS per cent increase in composite in
dustrial activity in the United States
during 1896 has been the fact that
this expansion has been 50 largely
concentrated among the durable goods
industries. Depression in these lines
has been primarily responsible for the
continuing unemployment and for the
restricted volume of new long-term
financing.
The year closes with industrial &C
tivity in the aggregate at virtually the
normal" levels Of previous years, but
there Is still room for wide improve.
ment in the production schedules OF
most Of the heavy industries. Con-
sidering the fact that large deficits of
capital facilities accumulated during
the depression, it appears reasonable
to believe that protracted period OF
large-scale activity is still ahead.
This forecast applies in particular to
such industries as steel. building ma =
terials, railroad equipment, electrical
equipment and farm and industrial
machinery.
Advance Orders Heavy.
Heavy advance ordering for 1897 de-
livery already assures the maintenance
Of high operating schedules in all Of
these major heavy industries for an
indefinite period. Based on recent
comprehensive studies by the Stand
ard Statistics Co., composite indus
trial production for the first quarter
Of 1887 should be at least IS per cent
above that for the same period in 1886
and q forecast Of a gain in aggregate
activity for the year 1887 as a whole
Of 10 per cent appears reasonably
conservative.
Notwithstanding q persistent up
trend in production costs, the trend
Of industrial earnings in 1897 should
be upward at rate at least coinciding
with the increases in volume. Both
wage and raw materials costs are in
creasing in most lines. but little difii-
Guilty should be experienced in passing
these costs along to consumers under
present conditions. Moreover. revival
Of business confidence and the huge
potential credit supply, plus the main
tenance Of low interest rates. opens
the way for a large volume Of neces-
sary new capital financing on an ad-
vatageous basis.
Labor Is NIajor Problem.
The labor situation remains the
major problem with which American
business must contend in 1897. On
the one hand there is a shortage Of
skilled workers.
This may seem paradoxical in view
of the high unemployment figures
which still persist, but it Is quite un-
derstandable when it is considered
that few industries were able during
the depression years to continue their
training of workers for more skilled
positions.
Many industries will doubtless be
hampered in carrying out projected
increases in production schedules next
year by reason of their inability to
obtain additional skilled labor.
On the other hand, the intensive
drive by labor organizations for
unionization of workers, for rates Of
pay based on q shorter work-week,
and for the closed shop, is virtually
certain to cause strikes which will
interrupt production schedules Of
numerous companies. Although no
major industry wide strikes are likely,
labor disturbances will probably be
numerous next year.
Nevertheless the coming year should
prove a period Of further net gain in
business volumes and profits. The
forces Of basic economic recovery,
which are responsible for the current
improvement in the heavy industries,
promise to more than Offset any tenn
porary hindrances imposed by new
Federal regulatory legislation, credit
control measures. labor disturbances
or foreign unsettlement.