Cheers & a Groan

STATE OF BUSINESS

Of all the battlefronts of U.S. business, few are more crucial than construction. Last week the news from the builders was good. Instead of slumping off, construction is climbing at a record rate. First-quarter figures showed expenditures of $7.3 billion, up $108 million over last year. March brought a better-than-seasonal increase of $2.5 billion in contracts for new buildings, with highway construction up approximately 35% and total private building increasing by 8%. Reading the figures, construction men revised their earlier forecasts and started thinking of 1954 in terms of a record $36.1 billion year, $1,300,000 better than 1953's all-time high.

Cheering reports also came in from some other important sectors of the economy. Appliance sales were climbing, and the farm-machinery industry, feeling optimistic about the spring planting season, rehired nearly 10,000 laid-off workers and boosted production. Along Wall Street, the bull market soared higher (see below). The Dow-Jones industrial average jumped to 309.39, the highest point since Oct. 22, 1929.

The big trouble spot was retail sales. After holding fairly steady during January, sales began to slip. The March totals dropped 2% below February and 5% below March 1953. Mail-order houses announced gloomy figures. Sears, Roebuck sales were down 12.2% from last year and Montgomery Ward was off 22.8% for the month and 19.4% for both February and March. Retailers explained that mailorder catalogue prices were rigid compared to department stores, said people were beginning to shop around for bargains.

Other merchants blamed poor weather and a late Easter week for delaying the usual spring upsurge. They waited anxiously for Easter to come and go, and thought that the first few weeks afterwards would tell the story.

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