Show economic highlight highlights IFS CLOUD OUTLOOK FOR BUSINESS GAINS IN 1939 ENi ejected decline now at hand upturn expected in march the last trustworthy figures available at the time this is written show that the expected winter decline in industrial activity has begun in earnest at the turn of the year practically every expert forecast this so in itself it is nothing to cause worry it is believed that it will continue into march and that a new upswing will set in then which by fall will take us to a point substantially better than the standard 1923 25 average security values have faithfully reflected the current downward trend with values of most issues slowly sagging and turnover relatively small I lore ilore again the expected has occurred many financial advisory concerns advised their clients to sell the bulk of their holdings in the speculative field as long ago as the firs first t of the year it can therefore be argued that matters are going along in a more or less normal fashion and that the picture as a whole including prospective future as well as actual present developments is a comparatively ively happy one but at the same time there are a number of important is ifs that cannot help but cloud the outlook the exports experts write that business will get better t this his spring if government spending produces the hoped for result if the consumers goods industries find an expanding market and finally if fhe heavy goods industries dus tries are able to continue their slow march up from the bottom going tough it seems certain that government ment spending will be lavish and this is of course a highly favorable short term factor even as in the view of many it is an unfavorable long term factor because of its unpleasant influence on taxes and public debt the forecasters predict that there seems to be no reason why purchasing of consumers goods should not be at good levels for most of the year but and this is a very big but indeed there are many reasons why the heavy goods industries may find the going tough the railroads for example are one of the biggest customers of these basic manufacturing industries and a great deal must be done and quickly before the rail loads will be in in any position to spend money for expansion and betterment on a big scale it is believed certain that congress will tackle the railroad program this session and some good groundwork has been laid the presidents de ritts special committee of six has made an exhaustive report which has met with wide approval and contains many basic suggestions for legislative and regulatory changes but even if some such program is quickly enacted it will take a considerable time before it can bear much economic fruit it is therefore argued in some quarters that the government through the or some similar agency must make loans to the lines for purposes of expansion and improvement both in the interest of economic recovery and national defense what happens here re mains to be seen utility expansion equally important customers of the heavy industries are the light and power utilities As everyone knows without arguing the merits of the case the utilities are bedeviled by government competition and political attack inere will be some utility expansion this year to care for the normal growth in demand but until the differences between the utilities and the administration are settled there can be no big scale expansion of the kind that would really invigorate the heavy goods makers we have heard for years that these differences are about to be settled but nothing definite has happened so here is still another place where a big if must be eliminated before anyone can honestly say that the sailing is clear akl below par automobile sales have not come up to expectations some say this is due primarily to the used car problem others attribute it to the cautious attitude of a public which know what is going to happen tomorrow and is hanging onto its money whatever the reason the failure of sales to reach forecasts greatly reduces the output of those vital long dormant heavy goods industries to end this piece on a more optimistic ti note it can be said that the outlook for construction especially in the residential field is bright and this is a real help to the heavy goods manufacturers the urge to build homes is widespread and the long term low interest loans available now are enabling hundreds of thousands of families to turn their hopes into action more alore smoke than fire no discussion of business prospects and actualities even so brief a one as the foregoing would be complete without mentioning the current european situation the talk goes around some of it from high quarters that the italian french differences are an open powder keg what seems to be a virtual fascist victory in spain is also fraught with explosive dangers to our troubled peace and this obviously has an extremely dampening effect on investment and as a result on industry and spending one good sign most of the experts feel that there is more smoke than fire abroad and that 1939 will not witness a general war |