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MAY 1 9 5 7
business review
FEDERAL RESERVE
BANK OF
PHILADELPHIA
ACTURERS RAISE THEIR SIGHTS
capital spending plans for Philadelphia area firms
g. Manufacturers plan to spend more in 1957
in 1956, and more than planned last fall.
BUSINESS TRENDS IN THE PHILADELPHIA
FEDERAL RESERVE DISTRICT
Activity continues near high levels reached last year. Areas of
both strength and weakness, present in 1956, are still with us.
Additional copies of this issue are available
upon request to the Department of Research,
Federal Reserve Bank of Philadelphia,
Philadelphia 1, Pa.
b usiness re v ie w
unemployment figures generally have been be
having in a satisfactory manner. These facts and
others now seem to be piercing the gloom.
The latest figures to provide reassurance are
the McGraw-Hill estimates of capital expenditures
at the national level. McGraw-Hill finds that in
1957, business plans to spend 12 per cent more
than in 1956 for new plant and equipment. Since
this is about the same as the estimate arrived at
in the fall, it means that the gloomy talk didn’t
have any drastic impact on business-spending
plans.
This conclusion is reinforced by this Bank’s
spring check-up of manufacturers’ spending plans.
The story follows:
M ore than heartening
RAISE
THEIR
SIGHTS
A re-check on our fall survey of capital expendi
tures indicates that manufacturers in the Philadel
phia metropolitan area plan to spend $403 million
in 1957. This is 20 per cent more than they spent
in 1956. If spending goes as planned, manufac
turers will have increased outlays by a record
amount in 1957.
Perhaps the most significant news from the re
For the first few months of this year it seemed as
check is that manufacturers have upped their
if the gloom in some business circles was thick
sights since last fall. At that time, they told us they
enough to cut with a knife. The stock market was
a little shaky, there was talk of a “ hair curling”
depression, a late Easter distorted departmentstore sales statistics, and much of the business
SURVEY HIGHLIGHTS
press spotlighted signs of distress in various in
dustries.
It never quite seemed as if the facts looked as
1.
2.
bad as some made them sound. Nonetheless, many
were caught by this mood. To some extent, 1957
was written off as a “ second best year.”
Slowly the mood is changing. Gross National
Product totals for the first quarter, if not sensa
3.
4.
Local manufacturers plan to spend $403 million
in 1957, 20 per cent more than in 1956.
Tota l spending planned fo r 1957 is now 6 per
cent higher than anticipated in our fall survey.
Actual employment totals in December and
March were larger than projected last fall.
On the other hand, not as many firm s as fo re
cast they would, actually increased produc
tion over the past six months.
tional, are at least reassuring. Employment and
3
business re v ie w
1957 CAPITAL EXPENDITURE EXPECTATIONS
OF PHILADELPHIA METROPOLITAN AREA MANUFACTURERS
In m illions of dollars)
Ind ustries
1 manufacturing ....................................................................
Durables
........................................................................
Lumber and fu rn itu re . .
.............................
Stone, clay, and g la ss.....................................................
Prim ary metals ...............................................................
Fabricated m e t a ls ..........................................................
Machinery (excluding electrical)...............................
Electrical machinery .....................................................
Transportation e q u ip m e n t...........................................
Instrum ents and m iscellaneous....................................
Nondurables .........................................................................
Food and to b a c c o ..........................................................
Te xtile s ................................................................................
Apparel .............................................................................
Paper ..................................................................................
Printing and p u b lish in g ...................................................
Chemicals .........................................................................
Petroleum and coal pro ducts......................................
Rubber and le a the r........................................................
Spring estimate
1957
expenditures
Actual
expenditures,
1956
403.0
154.0
1.5
5.3
50.7
22.1
23.6
16.8
20.1
13.9
249.0
38.0
9.5
1.7
15.2
1 1.5
79.0
89.5
4.6
337.2
133.4
1.6
12.2
39.0
21.9
13.1
18.1
18.1
9.4
203.8
31.3
8.6
7.5
18.7
8.4
47.7
78.6
3.0
Per c
chan
+20
+ 15
— 6
— 57
+ 30
+
1
+ 80
— 7
+ N
+48
+22
+21
+ 10
— 77
— 19
+ 37
+66
+ 14
+53
would spend $381 million in 1957. Despite a great
Manufacturers reporting in the survey are lo
deal of gloomy talk, continued tight money, and
cated in Philadelphia, Bucks, Chester, Delaware,
the fact that some profit margins seem to have
and Montgomery counties in Pennsylvania, plus
narrowed, manufacturers say they are going to
Burlington, Camden, and Gloucester counties in
spend 6 per cent more than expected a few months
New Jersey. The spending is for new plant and
ago. Our fall survey was described as “ hearten
equipment in this eight-county area.
ing” ; this re-check has to be something more than
that.
D ow n-the-line stre n g th
This year, for the first time, we surveyed as
In the fall, we said, “ Total spending is to go
many firms in the spring re-check as we had in
higher in 1957 largely because the big spenders
the fall. In this way it is hoped that the results of
plan it that way.” Our point was that a relatively
the survey will portray spending plans even more
few big industry groups and a relatively few big
accurately. In the past, planned spending as re
firms within these industry groups were planning
vealed in our spring survey has proved a rather
large increases in spending. The big increases by
accurate forerunner of actual outlays. Last year,
big spenders were more than counterbalancing
for example, this survey showed that a sizable
small decreases by many industries and firms.
increase over the fall projection was in prospect.
That turned out to be what happened.
4
This is no longer the case. There is much more
evidence of “ down the line” strength in this sur-
business re v ie w
CAPITAL SPENDING OF MANUFACTURERS
SINCE 1952.
the case in the following table. These groups show
divergent trends since the fall.
Durable goods manufacturers now plan to
spend about 23 per cent more than last fall. As
MILLIONS $
the table shows, all industry groups in this classi
fication except one increased their estimates con
siderably from the fall survey. Machinery makers
account for the largest increase. The only group
cutting back fall plans is stone, clay, and glass
makers.
A big increase over the fall estimate is planned
by lumber and furniture makers. Actually, how
ever, expenditures of this group are small as com
pared with most other classifications. And al
though this group is spending 67 per cent more
than anticipated in the fall, its spending still rep
resents a low point since 1952. The high point was
vey than in the fall. The spring re-check indicates
achieved in 1954, and expenditures this year are
that 11 of the 16 industrial classifications plan to
to be off 70 per cent from that peak.
spend more in 1957 than in 1956. In fact, this
solid show of strength is offsetting some weaken
ing in our largest spending category. Expenditures
planned by the petroleum industry in this area
show a $23 million decline from fall plans. (Fall
plans of the petroleum industry called for a $34
million increase in spending; therefore, despite
the severe cutback, spending still is to be $11
million higher than in 1956.)
Looking at it a different way, the conclusion
holds that the increase in total spending planned
this spring is more broad-based than last fall. In
the fall, 60 per cent of the firms that planned
changes in their spending programs in 1957
looked for declines. By the spring, there are as
many firms planning increases as decreases from
1956 levels of spending.
Durables plan a 2 4 per cent rise
Industrial classifications are frequently divided
into nondurable and durable groupings. This is
FALL AND SPRING PROJECTION OF
1957 SPENDING
( In millions of dollars)
Industries
Spring Fall (1956)
estimate estimate
of 1957
of 1957
expendi expendi
tures
tures
A ll m anufacturing..................... 403.0
D u ra b le s.................................. 154.0
1.5
Lumber and fu rn itu re ...
5.3
Stone, clay, and glass. . . .
50.7
Primary metals ................
Fabricated m e ta ls............ 22.1
23.6
Machinery (excl. electric)
16.8
Electrical machinery . . . .
Transportation equipment 20.1
13.9
Instruments and misc. . . .
Nondurables ......................... 249.0
Food and tobacco .........
38.0
9.5
Textiles ................................
1.7
Apparel ..............................
Paper ..................................
15.2
1 1.5
Printing and p ublishing ..
79.0
Chemicals .........................
Petroleum and coal prod. 89.5
Rubber and le a th e r.........
4.6
380.6
124.7
0.9
6.8
41.5
18.6
12.9
15.0
17.3
11.7
255.9
25.4
8.7
1.2
16.1
9.4
77.8
1 12.4
4.9
Per
cent
change
+ 6
+23
+67
— 22
+22
+ 19
+83
+ 12
+ 16
+ 19
— 3
+50
+ 9
+42
— 6
+22
+ 2
-2 0
— 6
5
business re v ie w
Electrical
machinery
is
another
interesting
group. A 12 per cent increase over the fall esti
mate is planned. In spite of this upward revision,
SELECTED PRICE CHANGES SINCE
SEPTEMBER 1956.
PER CENT
1957 spending by these makers will be lower than
in four of five preceding years.
Spending totals planned by other durables
makers will be at or near record highs.
A s lig h t decline fo r nondurables
Over-all, makers of nondurables plan to spend
about 3 per cent less than anticipated in the fall.
But of the eight industrial classifications within
the nondurables grouping, five plan increases.
Food and tobacco manufacturers plan to spend
MACHINERY
PRICES
WHOLESALE
PRICES
CONSTRUCTION
COSTS
half again as much as they previously announced.
The large cut-back from fall estimates projected
Apparel makers, however, still plan to spend only
by the petroleum industry swings the balance
$1,700,000 in 1957 as compared with $7,500,000
downward.
in 1956. Spending this year will be the lowest on
A little perspective on some of the figures is in
record for this category.
order. Apparel makers show a good-sized increase
On the other hand, the petroleum industry,
in their expectations as compared with the fall.
which plans a 20 per cent decrease from the fall,
still plans to spend more in 1957 than in any
other year on record.
PERCENTAGE DISTRIBUTION OF MANUFAC
TURERS’ PLANS TH IS SPRING AS COMPARED
WITH LAST FALL.
W H Y TH E CHANGE?
The big question that emerges from this re-check
PER CENT
60
----------------------------------------------------------
is “ Why the change?” We have already said it
amounts to a 6 per cent upward thrust. The chart
shows that over half of the firms changed their
plans since the fall. And of the firms changing
plans, two-and-a-half times as many decided to
increase spending as decrease. But the question
that remains unanswered is, why?
It is possible to start by saying that some of the
changes have come about because the figures given
us in September were arrived at before end-of-theyear meetings put the stamp of approval on them.
Undoubtedly, to some extent, this is the case. But
this doesn’t account for the preponderance of
N O CHANGE
6
INCREASE
DECREASE
firms planning to hike spending.
b usiness re v ie w
It costs m ore now
Business conditions have changed
Certainly, a part of the upward shift in spending
The general business environment within which
could be purely price. All wholesale prices and
manufacturers make their spending decisions
construction prices are up just 1 per cent from the
would logically be expected to exert an influence
date of the original survey in September. Machin
on the spending decisions. A generally more buoy
ery and equipment prices, however, have risen by
ant business environment than anticipated could
between 3 and 4 per cent.
be responsible for larger spending plans. Is busi
Of course the fact that these prices have been
on the rise in the recent past should be evaluated.
This, it would seem, could cause some manufac
ness better than expected?
The answer to that one can go either way. First,
let’s take the affirmative.
turers to have assumed a certain rise in price last
In September, we asked manufacturers about
September when they announced their plans. It is
their employment anticipations. From their re
just about impossible to tell how many did this,
plies, we constructed prospective employment
because this kind of an assumption can be im
totals for December and March. The table below
plicit or even subconscious. But no matter what,
indicates that actual employment totals in Decem
it does seem safe to say that some part of the in
ber and March exceeded expectations by a small
crease in spending is attributable to the rather
margin. There is also some correlation between
rapid rise in machinery and equipment prices.
larger-than-expected employment totals and up-
ACTUAL EMPLOYMENT TOTALS EXCEED FALL EXPECTATIONS
(In thousands)
Industries
Dec. 1956
estimated
Dec. 1956
actual
A ll manufacturing .......................................................
Durables ......................................................................
Lumber and f u rn it u re .........................................
Stone, clay, and g la ss.........................................
Prim ary m e t a ls .....................................................
Fabricated m etals................................................
Machinery (excluding electrical).....................
Electrical m a c h in e ry...........................................
549.6
265.9
8.5
13.7
39.1
41.7
46.9
56.7
554.3
269.4
9.1
13.7
40.6
41.0
48.9
Tra nsp o rta tion e q u ip m e n t...............................
30.4
32.6
Instrum ents and m iscellane ous........................
28.9
283.7
28.5
284.9
50.1
42.5
60.5
21.5
34.3
35.6
50.8
41.6
61.3
21.7
34.3
36.2
22.8
16.4
22.6
16.4
N o n d u ra b le s...............................................................
Food and to b a c c o ..............................................
Te xtile s ...................................................................
Apparel .................................................................
Paper ......................................................................
Printing and p u b lish ing ......................................
C h e m ic a ls...............................................................
Petroleum and coal p ro d u c ts..........................
Rubber and le a t h e r...........................................
55.0
March 1957
estimated
553.3
269.4
8.8
13.9
39.1
42.4
48.6
56.6
30.8
29.2
283.9
49.1
4 3.0
60.6
21.6
34.1
36.0
22.8
16.7
March 1957
actual
555.2
266.4
9.2
13.7
40.3
41.6
48.7
53.3
31.2
28.4
288.8
49.9
41.9
64.1
21.3
37.2
35.6
22.6
16.2
7
business re v ie w
ward revisions in spending plans within the indus
trial classifications. All of this seems to indicate
pretty positively that the general business environ
DIRECTION OF ANTICIPATED CHANGES
IN PRODUCTION
(Percentage distribution of firm s)
A ll manu
facturing Durables
ment is healthier than anticipated.
But remember, we said the answer to this one
can go either way— here’s the negative.
In September, we also asked manufacturers
about their production plans. They told us
whether they expected no change, an increase, or
a decrease in their production from one quarter to
the next. This spring we asked manufacturers
what they actually experienced in the fourth quar
ter of 1956 and the first quarter of 1957. We also
Second quarter 1957
Increase .......................
No change..................
Decrease ....................
Th ird quarter 1957
Increase .......................
No change ..................
Decrease ....................
Fourth quarter 1957
Increase .......................
No change ................
Decrease ....................
Non
durables
40
44
16
45
38
17
35
50
15
32
48
20
32
44
24
32
51
17
40
44
16
47
38
15
34
50
16
asked them to project production trends for the
rest of 1957.
manufacturers were overly optimistic about pro
The following table tells the story. In the fourth
duction trends last September. This seems to say
quarter of 1956 and the first quarter of 1957,
conclusively that the business environment isn’t
more firms looked for increases than actually ex
so healthy as expected.
perienced pluses, and fewer firms looked for
declines than actually had dips. In other words,
Put together, the two seemingly conclusive
answers prove inconclusive.
Is the outlook b rig h te r?
Just as changes in the current business environ
ANTICIPATED TRENDS IN PRODUCTION
WERE MORE OPTIMISTIC
THAN ACTUAL LEVELS WARRANTED
ment would be expected to change spending plans,
so might changes in the business outlook. One clue
(Percentage distribution of firm s)
A ll manu
facturing
Fourth quarter 1956
Actual —
Increase .....................
No change................
Decrease ..................
Fall estimate, 1956
Increase ....................
No change ................
Decrease ..................
F irs t quarter 1957
Actual —
Increase .....................
No change................
Decrease ..................
Fall estimate, 1957
Increase ....................
No change................
Decrease ..................
8
as to the business outlook of manufacturers in this
Durables
Nondurabl
survey may be provided by their inventory plans.
We asked manufacturers in September if they
expected to maintain, increase, or decrease their
40
39
21
47
36
17
33
42
25
48
38
14
51
35
14
45
41
14
34
39
27
40
33
27
29
45
26
inventory by March 1958. About 63 per cent of
the firms said they planned no change, but 24 per
cent said they would draw down stocks and just 13
per cent said some increase was on the way.
In September when firms looked ahead for a
year, 66 per cent said inventories would remain
the same, and about the same number of firms
(17 per cent) looked for a decrease as for an in
crease.
38
47
15
41
46
13
36
47
17
Generally speaking, when firms anticipate more
buoyant business activity, they stock up. In this
b usiness re v ie w
light, current inventory anticipations reflect less
Conclusions
optimism in the business outlook of local manu
It would be difficult to interpret this report any
facturers than last fall.
way but optimistically. Local manufacturers told
Another indication of the future business cli
mate as manufacturers see it is provided by the
table opposite which summarizes their production
anticipations. Generally, this seems to be an opti
mistic report, but no more optimistic than last
fall’s production forecast.
us last September they were going to spend 13 per
cent more in 1957 than they had in 1956. Now, six
months and a lot of gloomy talk later they say they
are going to spend 20 per cent more in 1957 than
in 1956.
In addition, this spring report has a certain
A ll o th e r reasons
solidity that our September survey lacked. The
There are any number of additional reasons why
increases are more widespread among industry
firms may have raised their spending sights since
groups and firms within an industry.
September. Competitive conditions within a given
The big question that the survey provokes is,
industry might have changed in such a way as to
why? Why should manufacturers’ capital spend
require more spending than planned. New devel
ing plans for 1957 be larger in the spring than
opments and techniques of production requiring
last fall?
different kinds of equipment may have sparked
We have tried to explore some reasons why this
spending in an industry. The changing nature of
change has taken place. There seems to be little
the Administration’s defense budget with its grow
ing emphasis on missile development could have
evidence to support the theory that business activ
occasioned some rise in expenditures within cer
tain industries.
These are just a few of the changes that could
affect spending plans of firms within an industry
ity has progressed more favorably than manufac
turers anticipated. Likewise, it is difficult to sup
port the thesis that their outlook is brighter this
spring than it was last fall.
Some of the increased spending is no doubt
or industries. Generally speak-ng, this type of
change is frequently thought to have offsetting
attributable to the fact that machinery and equip
consequences. Peculiar circumstances which ig
ment prices have risen rather rapidly over the past
nite spending within one industry may tend to
six months. Some, too, probably comes as a result
curtail a roughly commensurate volume of spend
of peculiar competitive circumstances within given
ing in some other industry, but this commensurate
industries. And some comes as a result of forces
cutback does not necessarily follow.
so varied and diverse as to preclude explanation.
9
business re v ie w
BUSINESS TRENDS
IN THE PHILADELPHIA
FEDERAL RESERVE DISTRICT
On the basis of first-quarter trends, 1957 looks
ing, while high-level operations remain in pros
more like a year in which Third District business
pect in others. In automobiles, that looked-for
activity may level off rather than continue to ex
bulge in demand has not materialized. Only the
pand, as was the case over much of 1956.
used car market shows strength.
Nevertheless, some of the elements of greatest
strength that contributed to last year’s high-level
Lab o r-m a rke t changes continue n a rro w
activity are still present. Our spring re-check of
Relatively minor changes have occurred in Third
the capital spending plans of local businessmen,
District labor markets in the past several months.
for example, seems to reflect even more optimism
In January, an increase in unemployment in the
than was expressed in our initial survey last fall.
Wilmington market changed that area’s official
Although employment has not shown many in
classification from one of labor scarcity to one of
creases worthy of note, neither has it declined
appreciably in any important sector. One basic in
dustry— primary steel— has maintained above
capacity operations for many months, and pro
ductive facilities are still expanding. In an impor
tant area of consumer spending— sales of depart
ment stores— dollar volume through the Easter
period made favorable comparisons with 1956.
Two main areas of weakness in this year’s busi
ness picture— homebuilding and automobile sales
small labor surplus. Most of the cutbacks came in
construction, as a large refinery project neared
completion, although activity also slackened in
several manufacturing lines, including food proc
essing, ordnance, apparel, and chemicals. Another
unemployment rise occurred in the Lancaster area
about mid-March, following layoffs in electrical
machinery, fabricated metals, and textiles.
Meanwhile, employment prospects for the pe
riod ending the middle of May have improved
somewhat in two other major areas and in lines
— also were evident all through 1956. In these
that had shown weakness earlier this year. In
sectors of the Third District economy, conditions
Philadelphia, some gains appear probable in food
seem to have deteriorated somewhat further in
processing, electrical machinery, and chemicals.
recent months. For the construction industry as a
The York area is expecting improvement in the
whole, however, the current situation still com
service and household machinery line, which in
pares favorably with a year ago. Activity in some
cludes refrigeration and air conditioning equip
fields of non-residential building is still expand
ment.
10
b usiness re v ie w
Elsewhere in our District no changes in labor-
Basic steel capacity is increasing
market status have occurred since the turn of the
Steelmaking in our District is continuing to ex
year. We still have three major areas— Atlantic
pand, and in at least one of the past three years
City,
Wilkes-Barre-Hazleton—
the tonnage gain was among the sharpest reported
where the number of job applicants substantially
anywhere in the country. The trend seems to be
exceeds employment opportunities. And in seven
continuing, with one large producer reporting an
of our small industrial areas, unemployment has
expansion program that will boost the plant’s
Scranton,
and
remained a pressing problem for a long time.
capacity almost 25 per cent. Among the sharpest
Berwick,
Lock
increases in ingot-producing facilities over the
Haven, Pottsville, Sunbury, and Bridgeton are the
past three years were those reported in or near
small labor markets where substantial percentages
such areas as Bethlehem, Harrisburg, Johnstown,
of the local labor forces remain unemployed.
Milton, and Philadelphia.
Clearfield-DuBois,
Lewistown,
Operations at local steel mills have continued
Factory em ploym ent has leveled o ff
In this District as a whole, factory employment
above their rated capacity in every week since
last August. Moreover, production seems to have
through the first quarter of 1957 continued close
been especially well maintained over the winter.
to the levels prevailing over much of last year. In
This trend contrasts sharply with the declining
places like Philadelphia, Harrisburg, the Lehigh
tendency that has been in evidence at the national
Valley, and Scranton a remarkable degree of sta
level since late February. The heavy products
bility has persisted for some months. But only in
the Harrisburg and Scranton areas were employ
which account for so much of the steel processed
in this District seem to have been a major factor
ment levels appreciably higher than in the early
in maintaining operations at local ingot mills,
months of 1956. Primary metals and apparel, re
while output in some other areas was declining.
spectively, are the largest employers of factory
labor in those areas. In Wilkes-Barre and Wil
Coal production shows
mington, employment has increased appreciably
from relatively low levels prevailing last fall.
d ive rg e n t tendencies
Supported by a fairly stable demand from in
Lancaster is an area where persistent weakness
dustry, the production of bituminous coal in
has been in evidence since last August. In Read
Pennsylvania continues near the high levels pre
ing, Trenton, and York, factory employment
vailing during the first quarter of last year. Out
trends have been generally downward since the
put has risen more than seasonally since Decem
turn of the year.
ber and in March was the largest for that month
Average working time of production employees
since 1952. In the anthracite fields of this state,
in Third District factories has fluctuated narrowly
however, the production trend has been largely
for several months, a little below the levels of a
downward since mid-January and appreciably
year earlier. Among individual industries, trans
below year-ago levels. Although new industrial
portation equipment is about the only one to show
uses for this fuel have increased, demand for heat
a decided cutback. In fabricated metals, pretro-
ing purposes has continued to slacken. Last year,
leum, and lumber, working time showed a rising
export demand for anthracite was an important
trend throughout the first quarter.
factor in a higher level of colliery output.
11
business re v ie w
Building ac tivity shows
weeks of 1957, has improved considerably since
a sm all gain o ve r 1 9 5 6
the middle of March. A late Easter this year threw
Supported by a relatively high level of operations
most of that holiday’s business into April, conse
in the non-residential field, building and construc
quently actual sales in March and for the first
tion in this District in the quarter ended March
quarter as a whole trailed those of 1956 by a small
was slightly higher than a year earlier. In the area
margin. When allowance is made for the shift in
of homebuilding, however, recent trends offer
the date of Easter, however, March sales showed
little in the way of encouragement. According to
the F. W. Dodge Corporation, the value of all con
a gain of 8 per cent over a year earlier. On this
basis, all but two of our metropolitan areas—
tracts awarded through March was up 2 per cent
from the 1956 level. All of the gain, however, was
Lancaster and Scranton— experienced larger sales
in March this year than last. Weekly sales figures
in non-residential building, which includes indus
for March and April, which include the Easter
trial, commercial, and educational structures.
buying season in both years, indicate that dollar
Contracts for public works and utilities showed
volume in Third District stores was up almost 3
only a small decline in this period, but residential
per cent from the 1956 period.
awards were down an average of 20 per cent. On
the basis of total residential awards, the home-
A utom obile re g istra tio n s are
building picture appeared least favorable in cities
disappointing
like Reading, Philadelphia, Lancaster, and Har
Registrations of new passenger cars in Third Dis
risburg. Among the larger city areas, Trenton
trict counties of Pennsylvania have continued to
alone seemed to have a much larger dollar volume
run considerably below expectations for some
of home construction in prospect this spring than
weeks. Midwinter sales were generally below the
last.
levels of one and two years ago and disappoint
Mortgage money here, as almost everywhere
ment increased in March and April, as the long-
else in the country, has continued tight for many
awaited spring bulge in demand failed to mate
months. Latest reports from this District seem to
rialize. In these counties, first-quarter registra
indicate that a somewhat easier situation may be
tions were 22 per cent smaller than in 1956, when
developing. But thus far many of our local build
a similar year-to-year comparison showed a rise
ers remain hesitant about proceeding on anything
of 10 per cent. Perhaps the brightest spot in the
but a reduced scale of operations. This year’s
automobile picture this spring is the continuing
trend in residential starts is said to be toward
strength in the used-car market, where the demand
houses that will sell in the higher brackets— from
for late models has been strong.
$15,000 and up. Rising costs of land improvement
and construction seem to be a most important
factor.
Freight-car loadings are down fro m 1 9 5 6
First-quarter loadings of revenue freight ran ap
preciably below relatively high levels prevailing
D e p a rtm e nt-sto re sales tre nd
a year ago. January and February totals showed
is encouraging
large percentage declines, but in March the spread
Dollar volume at Third District department stores,
narrowed considerably. Shipments of coal, which
while somewhat disappointing in some early
account for a substantial proportion of the freight
12
business re v ie w
volume in this area, were down 8 per cent from a
respectively. In the early months of 1957, Third
year ago in the three months ended March. Load
District farmers were reporting slightly larger re
ings of merchandise and miscellaneous freight,
ceipts from marketings than a year earlier.
including manufactures, were off 6 per cent in this
period. Forecasts of second-quarter total loadings
Consumer prices are s till risin g
for the Allegheny region, which includes this Fed
Over the past 15 months, living costs in Philadel
eral Reserve District, indicate a rise to a level
phia have risen at a slightly faster rate than the
about 1 per cent above 1956.
average for the country as a whole. Between Jan
uary 1956 and March of this year, the local index
Farm cash income is highe r
has gone up 4.7 per cent, as against a national in
Farmers in Pennsylvania, New Jersey, and Dela
crease of 3.8 per cent. This tendency persisted
ware received more for their marketings of crops
over much of last year and continued through the
and livestock products in 1956 than in either of
quarter ended March 1957. Food, transportation,
the two preceding years. The sharpest increase
and housing costs in Philadelphia have risen more
over a year ago was in income from crops— up 7
than some other items. In the housing component,
per cent compared with a rise of only 1 per cent
at least, it appears likely that further advances
in cash received from livestock and livestock prod
must be expected. Rents have shown little evidence
ucts. Last year’s increases in farm cash income
that stability may be near, while land improve
were especially pronounced in Delaware and New
ment
Jersey, where they amounted to 14 and 7 per cent,
rapidly.
and
construction
costs
are
increasing
13
FO R TH E R E C O R D . . .
AGO
T h ird Fe d e ra l
Reserve D istric t
Employ
ment
Pe r cent change
SUMM ARY
LO CAL
mo.
ago
O U TP U T
M a nu fa ctu ring p ro d u c tion. . . C o a l m in in g .................................... -
1
yea r
ago
3
mos.
1957
from
yea r
ago
-3
0
-4
-3
M arch
1 9 5 7 from
mo.
ago
+
+
1
year
ago
3
mos.
1957
from
year
ago
+ 3
+ 2
+ 2
-3
CHANGES
EM PLO YM EN T A N D
IN C O M E
Factory employment ( T o t a l) . . .
0
0
TR A D E**
Department sto re s a le s ............. +
Department sto re stoc ks............ +
0
+2
0
+ 2
5
1
+ 8
+ 4
-2
+ 1
+ 6
-3
-3
-3
4t
+2
+ 7
-2
-2
-3
+ 4 t
+
C o nsum e r.........................................
**A djusted for seasonal variation.
0
+ 1
+ 1
2
1
+ 4
+4
0
2
1
2
1
11
+2
+ 7
-5
-6
-2
4
+2
8
-5
-6
-3
+7
ot
+
+ 4t
+
+
0
0
4
4
Stocks
mo. year mo. year mo. year mo. year mo. year
ago ago ago ago ago ago ago ago ago ago
-1
-2
+ 4
+ 2
+
+
6
0 + 10
7 +
7
+
9 +
4
1 + 24 - 1 4 +
8 +
2 +
8 +
1
7 + 16 -
2 +
7 +
5
+ 13 +
3
0 + 20 +
5
+ 14 + 1 1 +11 -
3
-2
+
+
+
-
Sales
Payrolls
+ 4{
t2 0 Cities
{Philadelphia
+
+
+
Lancaster. . .
0
-2
+ 1 +
Philadelphia.
B A N K IN G
( A ll member banks)
0
D e p o sits............................................
0
L o a n s ..................................................
2
Investm ents...................................... 3
U . S . G o vt, s e c u ritie s ............... O t h e r ..............................................
1
Check payments............................ + 1 3 t
P R IC ES
2
Check
Payments
Per cent
Per cent
Per cent
Per cent
Per cent
change
change
change
change
change
March
March
March
March
March
1957 from 1957 from 1957 from 1957 from 1957 from
-1
2
1957
Department Store
Factory*
U n ite d States
P e r cent change
M arc h
1 9 5 7 from
AGO
0
+2
0 +
Reading.......
+
+
-4
-1
Scranton. . . .
+
-1
-2
-1
-3
+
3 +
Trenton........
-2
-1
-2
+
4
+ 23 +
2 +20 +
9 +26 +26
0 +
3
+ 18 -
9 +
2 +13 +
8 -1 2 +
6
+
0
-2
W ilm ington..
4
3
W ilkes-Barre
+ 1
-2
-1
+
3 + 18 +
7
York.............
-1
-2
-2
-
1 + 28 -
1 +14 +
8 +
4 +
5
-
+ 12 + 1 2 + 1 9
1 +
8 -
1
1
0
3
*N o t restricted to corporate limits of cities but covers areas of one or
more counties.
15
@FedFRASER