Evening star., 1938-06-06
BUSINESS FACES
QUIET SUMMER
DuIIest Season in Several
Years Predicted by
Standard Statistics.
Epec'al Dispatch to The Star.

spec'al Dispatch to The Star.
NEW YORK, June 6.-In its week
ly summary of the general business
situation the Standard Statistics Co.
of New York currently comments as
follows:
Business is facing the dullest sum-
mer in several years. Indeed, opera
tions in a number of industries will
probably not be much above the levels
prevailing at the low point of the
last depression. The Standard Statis-
tics Co. index of industrial produc-
tion, which has been following a
roughly horizontal course since the
beginning of the year, is expected to
reach new low for the current de-
preston this summer The index for
the first four months of the year
averaged close to 10 Q926 equals 1000
and recession to around $3.50 in
July and August is looked for.
Auto Men Plan Cuts.
THE automobile industry is plan
ming sharp further curtailment of
operating schedules during the third
quarter. Schedules are on a day-to-
day basis, making it difficult to ven-
ture definite estimate, but produc-
ton is likely to be below that for the
third quarter of 1882, which marked
the low for the last depression. Such
a development would not be without
its favorable implications, however,
as manufacturers are making stren-
uouS efforts to be in position to
enter the new model year with healthy
inventories, and only through re-
stricted production can this objec-
tive be attained.
With automobile production Sc
verely depressed it is obvious that the
accessory companies, tire producers
and steel manufacturers will likewise
be operating at a low ebb. Steel
consumers are continuing to purchase
on a strictly hand-to-mouth basis,
and the trade consensus is that ma
tional ingot operations may not av-
erage much more than 20 per cent of
capacity during several weeks this
summer.
The recent announcement that steel
prices will be unchanged for third
quarter delivery did not stimulate any
buying interest The trade recognizes
that the real test of the price struc-
Sure will come when there are one or
two large inquiries, and such inquiries
are not likely to develop until mid
summer or later, when the automobile
industry begins to anticipate require
ments for 1889 models. Barring the
unforeseen, the chances are that steel
prices will not be able to hold at pres
ent levels through the entire year.
Prices Still Vulnerable.
Commodity prices generally are
still vulnerable. Prices of bumper
crops are depressing prices of grains
and other farm products. Easiness in
the non-ferrous metal markets has
failed to encourage buying, and stocks
are continuing to pile up in the
hands of primary producers. Prices
of manufactured goods have not yet
felt the full force of depression in
huences, because of rigid wage and
other costs, but if this depression is
prolonged it will be only question
of time before prices (and wage rates.
are slashed. It might well be that
such development would mark the
final stages of the current deflationary
cycle.
The prospective decline in indus
trial production this summer is sig
nificant in that it indicates that fur
ther marked progress will be made in
reducing inventories. Consumption
has been running ahead of production
for some months, and there is sound
basis for believing that by late sum-
mer or early fall the inventory posi-
ton of industry generally will be
fairly healthy. This factor alone would
not promote a sustained business re-
covery, but it would mean that seri-
Gus depressant had been removed"