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still on vacation a survey o f the travel and vacation industry o f the Philadelphia fed eral reserve district capital spending: still falling b u s in e s s re v ie w http://fraser.stlouisfed.org/ £ Federal Reserve Bank of St. Louis ^1 NEW YORK THRUWAY T A C O N 1C S T A T E PA R KW A Y M E R R IT T PARKW AY SC R A N T O N MONROE' A L L E N T O W N Bf N EW YORK P IT T S B U R G H H A R R IS B U R G ^ W IL M IN G T O I .A N T IC B A L T IM O R E MAY W ASHINGTON STILL O N VACATION A Survey of the Travel and Vacation Industry of the Philadelphia Federal Reserve District Part II: The Problems The travel and vacation industry in this district sonality can be ascribed to the 23-degree angle of is beset with two major problems: seasonality inclination. There is no law that compels us to take and the need for modern facilities and services. a vacation between the Fourth of July and Labor The problems are easily stated but not easily Day. But most people do. The evidence is abundant. Seasonality leaves its solved. imprint all over resort communities. It shows up S E A S O N A L IT Y in cash registers, parking meters, church offerings, When the earth was hung up in space it was not boardwalk traffic, water consumption, milk deliv hung straight. If the earth had been hung so that eries, bank deposits, liquor sales, pinball machine its axis were perpendicular to the plane of the receipts, and tax collections. earth’s orbit around the sun there would be no One of the best reflectors of seasonality is the seasons. Day and night would be of equal length. luxury tax take at our largest resort. Almost 40 per Equable conditions of temperature would prevail. cent of the Atlantic City luxury tax is received in But the earth was cocked at a 23-degree angle, the months of July and August. Extend the period and so the travel and vacation industry of the to include June and September, and the tax collec Philadelphia Federal Reserve District has a sea tions for the four summer months almost reach sonality problem. To be sure, not quite all of the industry’s sea 60 per cent. In December, January, and February, collections are very low, as the chart shows. 3 b usin e ss r e v ie w MONTHLY COLLECTION OF ATLANTIC CITY LUXURY TAX 1956 of the transients are vacationers and some are not. Even among the vacationers, the destination may be either a summer or a winter resort. The Poconos have a few establishments that re main open during the winter months. Hunting, hiking, and skiing are off-season attractions— and so is honeymooning. Despite all the conquests made by June brides, marriage overtakes a sur prisingly large number of people in other months. In Ocean County, seasonality might be higher were it not for the winter-season activities at Lakewood and the year-round business activities of the county’s several inland cities. Cape May and Sus sex counties have made limited efforts to obtain JA N . FEB. MAR. APR. MAY JU N E JULY AUG. SEPT. OCT. NOV. DEC. off-season vacation business. Convention business, Seasonality is worse in some resorts than in however, requires large establishments with spa others. In Bedford County, for example, over 80 cious meeting-room facilities that are not in evi per cent of the retail and service establishments dence in these areas. are open eight months or more, while only 20 per cent of the establishments covered in Cape May M u st the in d u stry h ib e rn a te ? County are open that long. Seasonality of opera Annual off-season hibernation is the curse of the tions varies between these two extremes, as may travel and vacation industry. Large capital invest be seen in the vertical bar chart which shows for ments go unused for eight to ten months of the each of the resort areas the proportion of total year. If the automobile industry or the steel indus retail and service establishments that are closed try operated at 20 per cent of capacity year after part of the year. year, it would be looked upon as an unnecessary In Atlantic County, 60 per cent of all retail and service establishments operate the year round. This shows the influence of Atlantic City — a waste of resources. The existence of idle resources PROPORTION OF RETAIL AND SERVICE ESTABLISHMENTS NOT OPEN ALL YEAR metropolis with a permanent population of more than 65,000, and facilities for lodging and enter taining guests both in season and out of season. Atlantic City attracts conventions every month of the year, partly because of the promotional efforts to attract business in the off-season. Special events are scheduled for holidays and weekends to en courage off-peak vacations. Bedford County’s comparatively low rate of seasonality is rather unique. Bedford County caters to transients to a considerable extent. Some 4 1956 PER CENT b u sin e ss re v ie w in the travel and vacation industry is no less waste It is not suggested that seasonality can be elim ful. Even those areas that maintain operations inated, but it can be reduced considerably if active throughout the year, face a drastic drop in the and constructive efforts are exerted toward that level of utilization of their facilities. end. Resort leaders state that two trends have been Nor is idle capital the only problem. Hiberna observed in recent years: (1) the average stay of tion also idles labor. Fortunately, some of the off the visitor is becoming shorter, and (2) thtere are season unemployment is voluntary. The industry more “ day trips.” It is conceivable that both of draws heavily on college and high school students these trends might possibly be geared into a com who are in the labor market only during the sum prehensive plan for combatting the seasonal prob mer. Moreover, there is a body of migrant workers lem. who travel South in winter to Florida and other Another approach is to induce other industries Southern resorts. Nevertheless, seasonal unem into the resort areas so as to diversify economic ployment is a real problem as reflected in sharply activity— but that is another story. rising unemployment claims in our resort areas NEED FOR M O D E R N during off-season months. Falling temperatures and the public school cal FACILITIES A N D SERV IC ES endar are generally regarded as insuperable ob The second major problem of our travel and vaca stacles to the expansion of the resort season. Ob tion industry is obsolescence— out-of-date facili stacles though they are, the fact is that some ties and old-style services. Public bathrooms, im enterprising resort operators have lengthened their season in a variety of ways. Many of these provised showers rigged over old-fashioned tubs, early American plumbing, 25-watt bulbs spread take the form of special events fitted into the cal ing gloom from the end of a lone drop cord, elec endar when school children have holidays and tric fans, wicker furniture, match-fired gas ranges, long weekends. Moreover, there are sporting creeping elevators, sandy rugs, bumpy mattresses, events for all seasons of the year. paper-tbin walls, and ice boxes are not the kind of Seashore resorts have the ever-present natural facilities that attract present-day vacationers. advantage of the moderating influence of the Some of the outmoded facilities are a heritage ocean so that their winters are milder. An off of pioneer days. Travel and vacation was already season stroll on the boardwalk or beach in the a well-established industry in this district when absence of a crowd has a charm of its own. In the buffaloes roamed the ranges and Custer made his mountains, snow and ice set the scene for skiing last stand. A group of Philadelphia Quakers estab and skating and related winter sports. lished a resort at Buck Hill Falls in 1847, and People can be lured to take off-season trips to resorts by special inducements such as lower rates, Atlantic City built its first boardwalk in 1870. Today’s vacationer has purchasing power. He pageants, probably lives in a suburban home with an attrac dances, antique shows, sports and athletic con tive lawn in a setting with open space and sun tests, jousting tournaments, conventions, art ex shine. His home is equipped with sanitary plumb fashion parades, festivals, historic hibitions, writers’ conferences, card parties, house ing, self-defrosting refrigerator, indirect lighting, parties for fraternities and sororities, youth con thermostatically controlled heating, electric laun ventions, retreats, family reunions, etc. dering equipment, dishwasher, vacuum cleaner, 5 b usin e ss r e v ie w electric range, radio, television, and perhaps air resort is small and when the firms are in similar conditioning. When he takes his family on vaca types of business. Curiously, the firms most re tion he expects to find most of these conveniences luctant to cooperate in projects for local improve to which the family is accustomed. ment are those that need them most, and the oper In each resort area, accommodations and serv ators most willing to cooperate are usually the ices range from barely passing to super— from ones in least need of cooperation. The large resort lax to de luxe. Rates vary accordingly. Often the hotel, camp, or restaurant can perhaps isolate it weekly rate at some establishment is lower than the daily rate at a resort hotel within a few miles, self to a degree and offer a complete package that and the resort hotel is usually operating at a must rely to a considerable extent upon what the higher rate of occupancy. With prevailing levels of income, the limited- is competitive. The small guest home or restaurant area has to offer in the way of natural attractions and advantages. service guest home is rapidly losing business to The starting place for the individual operator the modern, full-service motel and hotel. And it must be with his own facilities and services; they isn’t always the largest places that are the best. must be of acceptable quality and quantity. The Some restaurants have waiting lines almost every next consideration is the general development and day, while others have tables with empty chairs offerings of the area. If the present resort areas for guests who seldom come to dinner. The field are to continue to be vacation-dependent, they work for this survey was performed during the should continue to offer ever-improving vacation 1957 season— a season which most operators said opportunities. Such improvement can come about was the best in four or five years. Despite the gen through individual effort reinforced by commun eral feeling of prosperity, some establishments en ity effort and industry-wide effort. countered declining volume of sales. Almost in variably it was the out-dated, limited-service places that had idle capacity. P ro gre ss th rou gh united effort The industry is large in the aggregate, but most of the individual establishments are small. Inde pendent operation, rather than joint effort is char acteristic of them. The small firms fear domina The ch a n gin g v aca tio n m a rk e t Probably the greatest change that has taken place in the travel and vacation industry is in its market. Its market has grown fast in recent years not only because of the rapidly growing population, but also because people have more leisure time, more money to spend, and a greater desire to travel. tion by their larger competitors; they doubt that The country’s 172 million people are the poten community promotion and improvement will be tial market. That multitude consists of 54 million beneficial to them as individuals. The larger the spending units — 9 million larger than in 1947, resort area the greater the spirit of independence just a decade ago. They might be called families, — the will to go it alone. since most of them are families or live together Cooperative effort is more likely to be found and pool their incomes to meet major expenses. among the larger firms that derive the major share More important is the improvement in their of their business from vacationers, and coopera economic well-being that has taken place during tion is more likely when the entire area of the the past ten years. Note the table which shows how 6 b u sin e ss re v ie w they have been stepping up higher on the income York, who can use the New Jersey Turnpike and ladder. The improvement is remarkable even after the Garden State Parkway. The seaside resorts of allowing for changes in the purchasing power of New Jersey are also within easy reach of vaca the dollar. Over 15 million families now have in tioners as far west as Chicago who now have un comes, after taxes, of $6,000 and over. These are interrupted turnpike motorways to the Atlantic the families that can afford a vacation, and they Seaboard. are the people to whom the travel and vacation industry might most profitably pitch its appeal. Sussex County resorts have the good fortune of being close to Baltimore and Washington— cities of about equal size— and Washington is probably the most depression-proof city in the country. DISTRIBUTION OF CONSUMER UNITS BY INCOME CLASS Family personal income The Poconos are doubly favored. They are at Percent of families the back door of New York and the northern ex tension of the Pennsylvania Turnpike makes the (before income taxes) 1947 1957 Under $2,000 ......................... ........... 25 14 Poconos easily accessible to Philadelphia vaca $ 2,000 to $ 3,999 ................. ............ 38 23 tioners. Moreover, plans are in the making to 4,000 to 5,999 .................. ............ 20 25 6,000 to 7,999 ................. ............ 9 18 8,000 to 9,999 .................. ............ 3 9 six-lane highway from the George Washington 10,000 to 4,999 .................. ............ 3 7 Bridge to the Delaware Water Gap. 15,000 and over .................. ............ 2 4 100 100 Total ....................... ............ Source: Survey of Current Business, U. S. Department of Commerce, A p r il 1958. bring the Poconos still closer to New York with a With such huge markets so close at hand, the major resorts of this district couldn’t possibly be better located. If they provide the kinds of services Air travel has greatly increased the range of and facilities that vacationers expect, the industry should prosper, provided sufficient lines of com travel and the choice of vacation spots— Canada, munication between the industry and its market Florida, Mexico,, Bermuda, Europe, or Hawaii, are established. Adequate communication, how just to mention a few. Moreover, jet planes will ever, requires more than an occasional advertise soon be in service and then no spot on earth will ment in the newspapers and a few magazines. It be more than 20 hours distant from any place in requires concerted effort on the part of the indus the United States. That is something to ponder for try to bring to the attention of the greatest number the travel and vacation industry of the Philadel of people precisely what facilities are available phia Federal Reserve District. While air travel and where and at what rates and what special at may enlarge the market for our vacation industry, tractions are offered. United efforts for better pub it also increases the competition from distant va licity could doubtless be performed best by the cation lands. resort associations. The travel and vacation indus As long as the automobile remains the favorite try of the district is size $600 million. Only one mode of travel, our local seashore and mountain cent out of each dollar would provide $6 million resorts are highly favored. The New Jersey sea for public information and publicity. Hawaii has shore resorts, so easily accessible to the vacation been lying out in the Pacific for ages, but last year ers of the Philadelphia metropolitan area, are — according to Willis J. Lipscomb of Pan Ameri now easily reached by vacationers from New can World Airways— Hawaii, by investing $800,- 7 b usin e ss re v ie w 000 in promotion efforts, induced Americans from Publishing Company asked what specific things continental United States to spend $65 million on people regard of importance on any vacation. vacations. Scoring highest was a change of scenery or sur roundings. Other things, in order of importance, P lan n in g fo r vaca tio n e rs were: a rest and a renewed outlook on life in gen Planning for vacationers is ever so much more eral ; a chance to meet people, new faces, different difficult than planning a vacation because vaca customs; touring by automobile; a chance to tioners do not run to type. Nevertheless, there are enjoy different foods and dishes; a chance to visit certain common objectives that people have in historic shrines; a hospitable atmosphere; and, a mind when they go on vacation. chance to attend concerts, festivals, etc. Our own In one of its numerous travel and vacation sur veys conducted on a nation-wide basis, the Curtis 8 travel and vacation industry has abundant oppor tunities to gratify these vacation desires. CAPITAL SPENDING STILL FALLING Results of Spring Check-up of Manufacturers in the Delaware and Lehigh Valleys Business hasn’t looked so good. Gross National cated in two neighboring areas in this district. In Product has fallen more than was expected. Most the Wilmington metropolitan area, spending plans of its principal spending components other than have been cut by 40 per cent since the fall. Tren- government are down. Retail sales have disap ton-area manufacturers now plan to pare spending pointed. First-quarter corporate earnings reports another 11 per cent. Spending plans in the Lehigh are not heartening. Valley metropolitan area are running strongly The foregoing brief recitation gives some im pression of the economic environment that pro vided the backdrop for this Bank’s spring check-up of manufacturers’ spending plans. It is not surprising that the survey revealed evidence of some further weakness. Manufacturers in the Philadelphia area now say counter to trends. Manufacturers there now plan to increase spending over their fall estimates by 45 per cent. In the fall, the Lehigh area had shown a large prospective drop of 39 per cent from 1957 levels. The spring revision would bring spending beyond year-ago totals. A REPO RT F R O M they are going to spend $331 million for construc P H IL A D E L P H IA A R E A M A N U F A C T U R E R S tion and equipment during 1958. Last fall they The paring down of fall spending plans is not at indicated spending would approximate $342 mil all surprising; in fact, the 3 per cent trim is some lion in 1958. Total spending in 1957 was $394 what less than might have been anticipated. The million. Further trimming of spending plans is indi following table shows how spending plans have changed by industry. 9 b usin e ss r e v ie w CAPITAL EXPENDITURE EXPECTATIONS OF MANUFACTURERS IN THE PHILADELPHIA METROPOLITAN AREA, 1958 (In millions of dollars) Industries All manufacturing ........................ Durables .................................... Lumber and furniture............ Stone, clay and glass............ Primary m e ta ls ...................... Fabricated metals ................ Machinery (except electrical). Electrical m achinery.............. Transportation equipment . . . Instruments and misc............. N ondurables.............................. Food and t o b a c c o ................ Textiles .................................. Apparel ................................ Paper .................................... Printing and publishing.......... C h em icals.............................. Petroleum and coal products. Rubber .................................. L e a th e r.................................. 394.3 161.6 5.0 10.5 54.8 21.3 22.5 18.9 18.2 10.4 232.7 38.1 10.3 2.1 14.8 11.7 7 1.2 74.8 9.1 0.6 Spring estimate 1958 Per cent change Spring estimate compared with fall estimate Per cent change 331.2 136.6 2.6 11.7 55.4 9.9 13.0 25.4 10.6 8.0 194.6 25.4 5.3 2.0 18.5 12.8 53.4 70.4 6.3 0.5 Total actual expenditures 1957 — 16.0 — 15.5 — 48.0 + 11.4 + 1•1 — 53.5 — 42.2 +34.4 — 41.8 — 23.1 — 16.4 — 33.3 — 48.5 — 4.8 +25.0 + 9.4 — 25.0 - 5.9 — 30.8 — 16.7 — 3.0 — 5.4 — 55.9 + 12.5 — 5.0 — 26.7 5.1 — 4.9 + 35.9 1.2 — 1.3 + 7.2 1.9 0.0 + 24.2 + 116.9 — 5.7 — 14.6 + 12.5 — 16.7 Of the seventeen separate industry groups, ten fall. Six have made upward revisions in their now show more hesitancy in spending than last plans, and one remains unchanged. CAPITAL SPENDING OF MANUFACTURERS IN THE PHILADELPHIA METROPOLITAN AREA SINCE 1952 Surprisingly, more firms have revised their spending plans upward than downward. The fol lowing table shows that 29 per cent of all firms have larger spending goals than in the fall. Just MILLIONS $ 27 per cent of the firms have cut back, and 44 per cent have not changed their anticipations. The firms cutting back are slashing hard enough, how ever, to more than offset the plurality of increases. It is interesting that the two industries scoring the sharpest upsurge in spending plans since last fall are printing and publishing, and transporta tion equipment. In the fall, these industries planned the deepest percentage-wise slashes from actual 1957 levels. 1952 1953 1954 10 1955 1956 1957 1956 In the case of printing and publishing, the b u sin e ss re v ie w planned increase restores spending to the actual about 80 per cent of capacity in the fourth quarter 1957 level and then some. Despite a large change of 1957, and at 75 per cent of capacity in the first in plans since the fall, manufacturers of transpor quarter of this year. They expect to operate at tation equipment still do not expect to spend as something like 76 per cent in the current quarter much as in 1957. and at 77 per cent in the summer months. By the which final three months of the year, manufacturers ex planned to hike spending by nearly $8 million last pect operations to be back at 80 per cent of fall, has had a change of heart. Refineries in this capacity. Conversely, the petroleum group, area now say spending will be cut back by about Slow but steady improvement in percentage of $12 million. The first table illustrates how spring capacity operations is expected over the balance spending plans compare with actual 1957 expendi of 1958. In view of this, it is no shock to find that tures. firms expect capital spending in 1959 to be close to 1958 levels. About 63 per cent of the firms re C a p a city a n d 1 9 5 9 sp e n d in g porting said they expected to spend about as much This spring, for the first time, we asked manu in 1959 as in 1958. The remaining firms were facturers questions about capacity and spending about evenly split between those which expected plans for the following calendar year. As a group, to increase and those which expected to decrease manufacturers told us they were operating at spending. CAPITAL EXPENDITURES: 1958 SPRING ESTIMATE COMPARED WITH 1957 FALL ESTIMATE Per cent of firms Industries All manufacturing.................................. Durables ............................................ Lumber and furniture.................... Stone, clay and glass...................... Primary metals .............................. Fabricated m e ta ls.......................... Machinery (except electrical)........ Electrical m achin ery...................... Transportation eq u ip m en t............ Instruments and miscellaneous . . . Nondurables ...................................... Food and t o b a c c o ........................ Textiles .......................................... Apparel ........................................ P a p e r .............................................. Printing and publishing ................ Chemicals ...................................... Petroleum and coal products........ Rubber .......................................... Leather .......................................... Higher 29 26 29 33 23 28 16 30 50 31 31 49 15 24 41 61 33 30 33 16 Same 44 43 50 28 58 42 54 31 17 30 46 36 62 57 41 21 42 10 42 52 Lower 27 31 21 39 19 30 30 39 33 39 23 15 23 19 18 18 25 60 25 32 11 b u sin e ss re v ie w Decline in activity ployment levels were below projections. Food and has jolted m anufactu re rs tobacco, and stone, clay and glass makers find Survey results show that the decline in business actual employment levels far below the expecta that has taken place has been considerably more tions they submitted last September. Employment severe than had been anticipated. in the printing and publishing industry has held up much better than was anticipated. In September, manufacturers were questioned about their employment expectations. Their re Another indication of the unexpected severity plies indicated they expected a decline by Decem ber and a small seasonal pick-up by March. Actual of the business slump comes from manufacturers’ reports on production. Predictions made last fall, employment in December was only 1 per cent when matched with actual results in the fourth below expectations. But the actual March employ quarter of 1957 and the January, February, and ment level was 5 per cent below manufacturers’ March quarter of this year, were found to be anticipations. overly optimistic. This was especially true of first-quarter 1958 figures. In each quarter, fewer In 13 of the 17 industrial categories, actual em EMPLOYMENT IN THE PHILADELPHIA METROPOLITAN AREA (In thousands) December December March 1957 1957 1958 March 1958 Industries estimated actual estimated actual All m anufacturing...................................... .............. Durables ................................................ .............. 548.5 542.6 262.7 260.5 552.5 265.9 517.5 246.9 10.3 Lumber and fu rn itu re ........................ .............. 9.4 10.5 9.8 ............ 13.8 13.4 13.9 12.5 .................................. .............. 38.5 37.1 39.0 35.7 Fabricated m e ta ls .............................. .............. Machinery (except e le ctric a l)............ ............ Electrical m achin ery.......................... .............. 40.8 41.4 41.4 39.2 49.2 47.9 49.4 45.4 52.5 51.1 32.0 52.3 32.8 48.4 29.9 Stone, clay and g la s s ........................ Primary metals Transportation e q u ip m e n t................ .............. Instruments and miscellaneous.......... ............ 31.2 27.3 27.1 27.3 25.5 .......................................... .............. Food and tobacco ............................ .............. Textiles................................................ .............. 285.8 282.1 286.6 270.6 52.1 50.8 51.4 44.0 40.1 40.0 41.8 38.3 Apparel .............................................. .............. Paper .................................................. .............. Printing and publishing...................... .............. 63.3 20.4 59.2 20.7 63.1 20.9 58.0 19.9 34.7 34.8 36.6 36.0 35.3 22.8 8.7 7.0 Nondurables Chemical p ro d u c ts ............................ .............. Petroleum and coal p ro d u cts............ ............... Rubber ................................................ .............. 36.7 36.4 35.7 22.7 23.0 22.7 9.1 9.1 9.1 .............................................. .............. 6.7 7.2 6.8 Leather 12 b u sin e ss re v ie w PRODUCTION PREDICTIONS firms than it was anticipated increased output. At the same time, the number that experienced declines was at least double the fall forecast. Production plans for the balance of 1958 show that manufacturers anticipate consistent improve ment in the second, third, and fourth quarters of the year. On the other hand, the prediction for the second quarter is considerably less optimistic than in the survey last fall. INVENTORY EXPECTATIONS PER CENT O F FIRMS INCREASE DECREASE ISO CHANGE Finally, inventory plans also reveal that new downward assessments are taking place. In the fall, more firms looked for some increase in inven tory over the next twelve months and fewer looked for a decrease than do now. Conclusion It is possible to find some “ silver linings” in this cloudy capital expenditures report. But you would have to be a blind and dogmatic optimist to ex tract a net balance of buoyancy from it. Clearly, the business situation is worse than it was at the 13 b usin e ss re v ie w time of the original survey in the fall— is worse Diversified Trenton also reported decreases, and than manufacturers thought it would be this these were centered in durable goods lines. spring. Clearly, too, manufacturers’ plans have been affected by the unexpected severity of the business SPRING ESTIMATES OF 1958 SPENDING COMPARED WITH FALL ESTIMATES Per cent change decline. Capital spending and inventory plans have been adjusted downward. It is possible that the spring survey reached manufacturers at the nadir of the recession. If that was the case, pos All metropolitan areas................ Lehigh V a lle y .............................. Trenton ...................................... Wilmington ................................ — 15.7 — 44.8 | — — II .4 — 40.0 sibly manufacturers’ actions will not be subject to On the brighter side was an increase in planned any further downward reassessments. Certainly that is to be hoped. expenditures of 45 per cent in the Lehigh Valley. RESULTS F R O M O U TSID E P H ILA D E LP H IA ufacturers in this area said they planned to cut Outside of the Philadelphia area an even more cau their 1958 expenditures about 39 per cent. Local tious air prevails. Reports from the Wilmington, firms in the very important primary metals and This is especially significant because last fall man Trenton, and Lehigh Valley metropolitan areas transportation equipment industries are now con show that manufacturers have cut their 1958 capi siderably more optimistic than last fall. tal spending plans 16 per cent since last fall. They Spending plans for 1959 in the three areas out now place outlays this year at $107 million com side of Philadelphia indicate that most firms are pared with the $155 million spent in 1957— a drop cautious. Tabulations show almost 60 per cent of of 31 per cent. Last year the decline was estimated DIRECTION OF ANTICIPATED CHANGES IN OUTLAYS IN 1959 at 17 per cent. ESTIMATED CHANGE IN 1958 CAPITAL EXPENDITURES PER CENT (Wilmington, Trenton, and Lehigh Valley metropolitan areas) Industries Total manufacturing ........ Durables ....................... Nondurables .................. Spring Actual estimate 1957 1958 Percent (In millions of dollars) change $154.5 64.0 90.5 $107.1 53.8 53.3 — 30.7 — 15.9 — 41.1 The further trimming of budgets did not reflect a general or over-all trend but, rather, was cen tered as to area, industry, and often as to firm. A 40 per cent slash in spending in the Wilmington area figured prominently in the three-area total, and one industry was largely responsible for this decline. 14 b usin e ss re v ie w The following gives the results of a national survey of capital spending plans of manufacturers. Nation ally, all manufacturers now expect an 18 per cent cutback in spending. In the Delaware and Lehigh Val ley areas, spending is expected to be down 22 per cent. CAPITAL SPENDING PLANS OF MANUFACTURING COM PANIES (millions of dollars) Per cent Actual Planned change Industries 1957 1958 1957-1958 All m anufacturing.................................... .............. $13,647 $11,129 — 18 Iron and s t e e l...................................... .............. 1,844 1,309 — 29 .............................. .............. 980 627 — 36 1,275 1,043 — 18 + 4 — 33 Nonferrous metals M a c h in e ry ............................................ .............. Electrical m ach in ery............................ .............. 599 623 Automobiles, trucks and parts.............. .............. Transportation eq u ip m e n t.................. .............. 1,058 544 709 528 — 3 Other m etalworking............................ .............. 942 690 — 27 Chemicals ............................................ .............. 1,724 1,569 — 9 Paper and p u lp .................................... .............. Rubber ................................................ .............. 811 200 527 -35 172 Stone, clay and g la s s ......................... .............. Petroleum refining .............................. .............. 572 853 493 768 — 14 -14 — 10 Food and b everages............................ .............. Textiles ................................................ .............. Miscellaneous ...................................... .............. 850 408 987 819 347 — 4 — 15 905 — 8 S o u rc e : U . S . D e p a rtm e n t o f C o m m e rc e , S e cu ritie s & Exchange Co m m issio n, and M c G r a w - H ill D e p a rtm e n t of Eco n om ics. all concerns expect to maintain their 1958 levels siderably by area. In Wilmington, only 11 per of capital outlays. Approximately one-fourth re cent of the reporting firms expected to raise out ported that decreases were anticipated next year. lays in 1959; in Trenton, 21 per cent were in a Only 17 per cent of the replies called for larger spending m ood; in the Lehigh Valley, 17 per cent expenditures. The degree of caution varied con were more optimistic about next year. 15 FO R THE R E C O R D . . . BIIU » S i MEMBER BAN K S 3RD F. R. D. BA N K IN G DEPOSITS CHECK PAYM ENTS (20 CTOS) ■ ' ■" y A A v ^VV ■ LO A N S _ + ■ _________________ 4 INVESTMENTS 2 YEARS AGO Third F e d e ra l R eserve District Factory* U n ite d States Pe r ce n t ch a n g e P e r ce n t ch a n g e LOCAL mo. ago year ago 3 mos. 1958 from year ago O UTPU T M anufacturing p rod uction. . . - 3 Construction co ntracts............. + 9 1 C o a l m ining............................... - 8 -15 -13 -27 -13 -19 -26 - 2 +39 - EM PLO YM EN T AN D IN C O M E Factory employment ( T o t a l ) . . . — - 8 -12 - 6 -10 - - - + 6 - 2 + + + + + + 1 -12 -12 -24 -10 -11 -20 1 - 9 - 8 - 4 5 - 3 mo. ago - 5 1 + 3 + 2 2 + 5 1 + 2 3 + 14 9t - 1t 2 2 3 + 2 + 1 + 3 0 +11 + 1t + + + + + 2 1 3 3 — ‘ Adjusted for seasonal variation. 16 Department Store Payrolls Sales Stocks Per cent Per cent Per cent Per cent Per cent change change change change change March March M arch M arch M a rch 1958 from 1958 from 1958 from 1958 from 1958 from mo. ago year mo. ago ago - 4 - 9 - year mo. ago ago year ago mo. ago year mo. ago ago 4 -12 + 11 year ago -1 + 5 + 2 + 9 + 7 + 3 + 3 + 5 + 3 +14 +12 + + 3 -14 - 5 -20 +13 0 Lancaster. . . . - 1 - 4 0 - 6 + 54 + 3 +18 + 10 + 7 -4 Philadelphia.. - 1 - 7 - 1 - 8 +36 + 5 + 5 + 1 + 8 -1 Reading......... - 4 -10 - 4 - 1 7 +37 - 6 + 8 - 4 + 6 -6 Scranton........ - 9 -18 - 7 - 1 8 + 50 +13 + 3 + 1 + 16 +4 Trenton.......... - 2 - 1 0 + 1 - 1 0 +34 - 2 +13 - 5 +24 +9 3 1t + 3t + 3t f20 Cities + 1 + 1 + 2 + 4 tPhiladelphia W ilkes-Barre. - 1 5 - 2 0 - 1 0 - 1 9 +42 + 5 + 5 - 4 + 7 +6 Wilmington. . . - 4 +12 2 - 5 0 - 3 +31 - 3 + 7 - 7 + 5 +2 York............... 0 - 7 0 - 5 + 20 - 1 1 5 +11 +2 3 PRICES C o nsum er.................................... + C H A N G ES 3 3 TRAD E* Department store s a le s ............ +11 — 1 B A N K IN G ( A l l member banks) D eposits...................................... L o a n s ........................................... Investments................................. U.S. G o vt, se cu ritie s ............. O t h e r ........................................ C h e ck paym ents........................ year ago 3 mos. 1958 from year ago M a rc h 1958 from m * Check Payments Employ ment SUM M A RY M a rc h 195 8 from YE AC? o + 2 + 3 + 10 - ‘ Not restricted to corporate limits of cities but covers areas of one or more counties.
@FedFRASER