Durables: Solid

One of the most important auguries for the future is that new orders for durable goods have risen two months in a row. This means that prospects for machine-tool builders and for the makers of primary metals--particularly steel--are better than at any time this year.

Orders for primary metals were up 10% in October, and most of this was because steel companies are finally beginning to receive substantial calls for more supplies from the booming automakers. But steelmakers have taken such a beating all year that they are afraid to take too much heart at these signs of turnaround. Warns one Pittsburgh executive: "Don't get any idea that the increase in manufacturers' orders means that the steel industry is going to end the year in a big surge. It just isn't there."

Steel production for 1962 is expected to reach 98 million to 100 million tons, almost exactly what it was in 1961, or in 1950, for that matter. Next year looks shinier for metals. Surveying 7,500 managers in fhe metalworking industry. Steel magazine reported that they generally expect sales to rise 5% next year, to a record $174 billion.

Orders for machine tools jumped 22% in October, to $61 million. This is important for the whole economy because manufacturers of all kinds usually step up their ordering of tools when they plan to boost output in the coming months. Toolmakers reported that orders were coming in from companies in every branch of business. "While the increase isn't startlingly high," says a top Administration economist, "purchases of machinery can be the trigger to a new advance in capital spending." If so, it would mean that the Kennedy Administration's grant of tax credits for plant modernization and speeded-up depreciation schedules finally may be paying some much-needed dividends for the economy.

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