Evening star., 1940-01-28
Industry Slows
as
Orders Slump
Outlook Is Uncertain:
Plants Catching Up
With BuckIogs
BY SMITH REAVIS,

Associated Press Business Writer.
NEW YORK, Jan. 27-The multi
predicted January decline in indus
trial activity showed up this week
in the charts, business indicators
and graphs so dear to Wall Street,
but there was nothing but slump
ing in new orders to indicate how
long 1t would last.
The hum of factory wheels and
the belching smoke of factories
slowed down perceptibly as mills
began to catch up with the COM
mitments piled on their books last
fall when many sections of business
thought the European war was going
to be more profitable than it turned
out to be.
Retail and wholesale trade which
had profted by cold weather
through most of the Nation, suffered
when the thermometer went sub
zero and swept the South with
snow. 1t held its own better than
production, but showed less increase
than had been expected.
The stock market. not sure
whether it had already discounted
in lower prices the depths Of the
business decline, piddled along
throughout the week. on very small
volume, without getting anywhere.
If business had any advice to give
it, whether gloomy or optimistic,
the counsel was ignored.
New Buying Expected.
Not all business executives viewed
the picture as blank. In some in
dustries it was thought new buying
to sustain high rates OF output
would appear in late February or
March, when present inventories,
still reported as lower than year
ago, were depleted. Others con-
sidered six months reasonable
time in which to build up new de-
mand. Spring is normal time Tor
expansion, but last year betterment
was delayed until summer by the
soft coal tie-up.
Meanwhile, trade authorities gen.
enerally agreed the high level OF
factory production in recent weeks
steadily has been eating into the
backlogs of unified orders taken
in the September-October war buy
ing.
Steel, where the autumn rush
to accumulate metal attained spec
tacular proportions, was watched in
financial circles as one of the best
indicators of how far the recess
sion would go before new buying
exceeded shipments from mills.
The steel industry, operating above
"a per cent of capacity at the au-
tumn peak, reduced its production
schedules the last week to 822 per
cent of capacity from 84.8 the pre-
ceding week.
The Iron Age, trade publication,
said further curtailment OF opera
tions was inevitable" unless busi-
ness comes in faster.
Current production is largely
sustained by backlog tonnage carried
over from the fourth quarter, but
this is rapidly diminishing" the
magazine added.
Consumption Heavy.
Steelmen, like other industrialists,
were comforted by indications there
was a solid base of business under
the froth of forward buying kicked
UP by the 1889 scramble to expand
inventories lest war boost prices.
Trade reports, for instance, noted
a large flow of industrial metal and
other materials into consumption
in the busy automotive, shipbuild-
ing, aircraft, machine tool and farm
equipment industries. Rail and pub
lie utility equipment needs also pro-
vided enlarged outlet for materials.
Automobile assemblies for the
week were estimated at 106, 400
units, compared with 108,545 tho
previous week and SO 200 year ago.
The industry was expected to set
a new January record.
For a look ahead in motor CEN
ters some analysts noted reports
automobile parts makers were re-
ducing production in expectation OF
slower rate of assemblies before
the usual spring squirt in auto
manufacture.
Cotton, wool and other textile
mills were judged in trade circles
to be heading for a decline in op-
erations as the huge reserves OF
untitled orders accumulated in the
final four months of 1899 are de-
pleted. New year demand for fab
RIGS was said to be running well
below actual production.
Dealers, 1t was pointed out,
seemed to have done most of their
buying last autumn, so that the
usual January pickup in textile
wholesale markets failed to appear.
Retail Demand Good.
Still emphasized as the best as
surance against a deep business
setback were the indications retail
demand for goods was well-sus-
tanned, except for TEMPORARY inter-
ference from snow and ice in the
coldest winter many places have
known in a generation.
Rejecting the curtailment in steel
d1lu GIlC dDSCllCC VI VIC uSudl Odllu@
ary upturn in some industries, the
Associated Press index of industrial
activity dropped to the lowest since
late October. It worked out at 1918
per cent of the 1929-30 level, COM
pared with 1898 the preceding week
and 90.3 per cent year ago.
Aircraft manufacturers, striding
ahead independently of the trend
in other industries, were concerned
mainly with the problem of ex-
panding output rather than finding
new business. In Washington Sec
retary of the Treasury Morgenthau
disclosed the industry had en-
countered "bottleneck" in engine
supply.
British and French governments
were reported seeking to increase
their airplane orders in the United
States, although most factories have
on hand all the business they can
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