U.S. INDUSTRY.

Star (Christchurch), Volume LXVI, Issue 20363, 21 July 1934, Page 18

U.S. INDUSTRY.

Production 86 Per Cent of 1923-25 Base. SLUMP IN BUILDING. WASHINGTON, June 20. One reason why Government spokesmen are waxing lyrical in their official statements is that the May and June shrinkage in business was no worse than it was. They had expected a stronger decline. You can see what has happened from the following table, in which each figure represents the percentage of 1923-25 averages:

The secret of the strength in industrial production is steel. A price increase goes into effect in July, so the mills have been humming to fill orders before the increased price is effective. That means a sharp curtailment of steel production next month. Automobile production is going fairly well. Figures for June will be down about 10 per cent from May. The output in April was 356,000 cars, in May 332,000, and in June around 300,000. That is because the manufacturers reduced their prices. They ran up against trouble when they tried to put an increase into effect some weeks ago. The trouble was caused mainly by a large manufacturer who refused to raise prices. The other big industry, textiles, is in a fixed decline. A twelve-week curtailment of cotton textile production (25 per cent) went into effect on June 4. Silk weaving shut down for one week in May. That end of the business is no better. Building Slump. The only bad note in the picture is building. No one will believe that, after all the pumping and puffing through the P.W.A. and otherwise, the construction industry now is operating at 25 per cent of normal. Yet that is the figure. The main reason for it is increased prices and increased labour costs, adopted some weeks ago under the code. These costs are already working themselves down to a more reasonable level.

The Administration is trying to build up the housing programme to meet the situation, but everyone realises that it Cannot stimulate the building industry very much this year. It will take months to get the organisation set up and working. The June tabulation on building will be out in a few days. It will show a slight decrease from May in the value of contracts awarded. The May value was £26,800,000, an increase of 2 per cent over April. This might be considered encouraging were it not for the fact that the increase was due to one big contract—for Radio City in New York. Generally, construction was off in May. The amount of direct public works and public utilities contracts awarded declined 19 per cent in May. That hardly fits in with the speech Director Ickes made claiming increasingly magnificent success for his programme. Optimistic Figures. Of course, Mr Ickes gets his optimistic figures by counting the amount of money he has advanced to States, municipalities and others for construction. Much of that money has not been spent and cannot be spent for months. That is the whole secret of the delay in getting the £600,000,000 P.W.A. fund working. Most of the mopey was loaned out and is now lying idle. Those who got it are unable to start work, because they are unable to raise their share of the cost, or because their plans were in an embryo state when they got the money, or for various other reasons. The proof of that is that the amount of public works contracts let in May was £14,320,000, a decline of 5 per cent from April. The value of privately financed building was £12,580,000, an increase of 13 per cent (the Radio City project).—N.A.N.A.. Copyright. ■

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