Springtime in Production?

Spring talk in the business world is talk of better business. Last week spring talk was of firming stock and commodity prices, of imminent upturn. But spring statistics had yet to measure up to the spring feelings of business. Although February production was figured at 109 on the Federal Reserve Board index (down 19 points from December's all-time high), most visible signs still indicated that consumption and exports were not big enough to keep inventories from growing:

>National Industrial Conference Board announced that in January its 300-odd reporting manufacturers had suffered a 3% inventory rise (over December) in spite of curtailed production. This was the fifth consecutive month of inventory rises. N.I.C.B.'s reporting companies are among the nimblest of U. S. corporations and U. S. business as a whole may well be having worse inventory worries.

>Best business spot recently has been auto sales, with 1940's first two months up about 30% from 1939. But January and February are the year's slackest sales period, and even good February sales were not able to keep pace with February production of 409,667 cars and trucks (down 12.6% from 1939 peak). By March 1 dealers had over 460,000 cars on their floors, and at the current rate may have nearly 550,000 units on hand April 1 (400,000 is considered about par for that date).

Last year, milder inventory trouble put April production 10% below March.

>Steel production, down for eight consecutive weeks, this week leveled off to 64.7% (up one-tenth of 1%), still ran about 50% ahead of new buying, mostly hand to mouth.

>Gasoline stocks rose again last week, hit 98,364,000 barrels, an all-time high.

An important reason: demand for fuel oil, normally a by-product of gasoline, continued to rise. Now gasoline has become virtually a by-product of fuel oil because refiners are compelled to make more & more unwanted gasoline in order to fill their fuel oil orders. To help move surplus gasoline, Socony-Vacuum Oil Co., Inc. cut Mobilgas from 12 1/2-c- to 12-c-.

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