Evening star., 1940-02-05
Inventory Expansion
Parallels Climb
In Production
Factory Shipments
Increase, but New
Orders Decline
Special Dispatch to The Star.

NEW YORK, Feb. 5.-Inventories
Of manufacturers continued to rise
in December, but still did not appear
excessive in relation to the volume
of business done, according to pre-
liminary indexes compiled by the
division of industrial economics of
the Conference Board. New orders,
however, again declined substan-
TALLY and viewed in the light Of
that development the inventory Sit
uation appeared less favorable.
The value of inventories at the
end of December, based on reports
of about 500 representative compa-
nies. was 3.3 per cent greater than
month earlier, which compared
with an increase of 53 per cent from
October to November
Since the end of August inven-
tories have increased l3 per cent, to
stand at the highest level since
March, 1898. The largest monthly
increase was reported in November,
rejecting the heavy delivery of or
ders placed in the buying boom
which Immediately followed the out
break of war
There still remained on the books
of many manufacturers a substan-
tial amount of untitled orders at
the year end, and in some instances
this must be considered as offsetting
the increase in stocks of goods.
Price Boosts a Factor.
A part of the August TO December
rise in inventories was attributable
to price increases. The physical
volume of stocks has consequently
increased less sharply than the dol
lar value. Compared with the aver
| age for 1929 the physical volume
of stocks showed a gain at the close
of 1889, although the dollar value
was moderately lower.
In relation to the volume of goods
shipped, stocks at the year end
stood at comparatively low level.
| According to new index compiled
by the Conference Board on the basis
of reports from the same companies
supplying inventory statistics, the
value of shipments in December was
% per cent higher than in August
and % per cent above the level for
December, 1888. The shipments in
dex established a low for the year
in April and by the time war broke
out had increased IS per cent.
In September the recovery was
accelerated and at the year end the
index stood At per cent above the
low for April The trend of this
index on the whole is similar to thai
for the volume of manufacturing
production, although during
period of marked price changes it
would be expected to move more.
widely than the volume of produc-
ton index.
New Orders Down.
New orders declined for the third
consecutive month in December, but
the drop was less pronounced than
in November. Compared with Sep
tember new orders showed a de-
crease of 81 per cent, which can
celed about three-quarters of the
ly-September increase. The De-
| cember level. however, was still IS
per cent higher than that for both
July, 1899, and for December, 1888.
In relation to the volume of new
buying the inventory situation at
the end of December was consider
ably less favorable than in several
preceding months. A divergent
movement of inventories and new
orders also occurred following a
heavy buying movement in Decem-
ber, 1886 The record for that
period indicates that even where a
burdensome inventory situation de-
velops as result of unusually heavy
buying, it is not fully revealed by
statistics for some time after the
peak in new orders.
Production schedules of manufac-
turing industries were raised at a
faster rate and to higher level
following the September, 1889, buy
ing wave than after that at the
close of 1886 New orders reached
slightly higher level in December,
1886, than in September, 1899, and
the average for the three months
| following each peak was about the
same. Yet manufacturing produc-
ton in the final quarter of last year
was rs per cent higher than that
for the first quarter of 1887.