STATE OF BUSINESS: Demand on the Rise

Of all the major indicators of U.S. economic health, manufacturers’ inventories were the last to turn around. Last week the Commerce Department reported that manufacturers, cutting down their inventories since October 1957, have begun to build them up again. Their stocks climbed $300 million to $49.5 billion on a seasonally adjusted basis. The backlog of unfilled orders in January totaled $47.6 billion, a gain of $800 million over December. The turn came just about when Government economists expected; they expect that inventories will continue to climb at a moderate pace for the rest of the year.

Big reason for the inventory buildup is plain: consumer appetites are getting bigger. Out of General Electric’s Appliance Park in Louisville went the biggest shipment ever—400 railroad cars with 22,000 appliances tagged at $5,500,000. Appliance makers noted sales running about 15% ahead of 1958 as consumers loaded up with refrigerators, washing machines, and gas and electric ranges. Much of the buying was for new houses; builders reported new residential contracts for $1,021,516,000 in January, up 32% from January 1958. With the faster pace, supplies of raw materials grew thinner as manufacturers hedged against possible strikes. The three major copper producers. Anaconda, Kennecott and Phelps Dodge, hiked copper 1½¢ per Ib. to 31½¢, highest price in 21 months. And steelmakers set a rate of 89.5% of rated capacity, said shipments were still far behind orders.