Midyear Appraisal

With tempered optimism, the midyear forecast of the Department of Commerce concluded: "Despite some soft spots, the general industrial outlook for the balance of 1956 is favorable."

Steel production reached 63 million tons in the first half, 3,000,000 tons over the 1955 record. Second-half production will be down, but, barring a prolonged strike (see NATIONAL AFFAIRS), should still total 54 million tons, making 117 million tons, the same as last year's peak. Construction, spurred by the great expansion in commercial building, was going along at a $44.5 billion-per-year clip, ahead of the 1955 record by $1.5 billion despite the lag in housing starts. New plant and equipment investment was running 22% in front of 1955. The electronics industry was heading for a $6.8 billion year, 8% ahead of 1955; factory sales of television sets probably will mount to $1 billion.

Automobile production in 1956 was figured to hit 6,000,000, down 1,900,000 from last year, but a total that would still make it the fourth best year. The Commerce Department foresaw farm machinery continuing downhill during the second half; "sales this year will probably be 15% to 20% below 1955." And textiles were threading through "an in-between year -not as good as 1955, or as bad as 1954."

Despite the soft spots, heavy consumer spending was keeping the boom rolling almost as fast as ever. Retail sales for the first five months neared $75 billion, 3.8% above last year. Manufacturers' May sales wrote a new record: $27.8 billion, up 6% over 1955. Manufacturers' new orders stood at $27.7 billion, up from the month before, although May orders usually slack off from April's. People were buying more because they were earning more. Commerce last week disclosed that 1955 family incomes before taxes averaged $5,520. And with the passage last week by Congress of the roadbuilding bill (see below), the economy will soon be further boomed by billions in spending.

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