Word: slumping
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Dates: during 1960-1969
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...basic reason for the industry's slump is not that most steel-users are using less steel, but that they are holding up on new orders while they work off the huge inventories built up right after the steel strike. Despite the auto industry's heavy production schedule, many auto firms still have an inventory of 30 to 45 days, v. the normal 20-day supply. Instead of ordering new steel to keep pace with production, they are taking half their current needs from inventory. Appliance, farm-machinery and construction-machinery industries are also raiding their large inventories...
Some experts blamed the rise of the compact car as a major cause of the steel slump, since each compact uses more than half a ton less steel than a standard model. But if the Big Three compact cars produced during March had all been standard-sized cars, the industry would have used only 36,000 more tons of steel. Since the auto industry uses more than a million tons of finished steel a month the difference is too small to be important. A likelier explanation of Detroit's drop in steel buying: automen have restored their steel inventories...
Steelmakers are not alarmed by the slump. First quarter earnings were up smartly. Jones & Laughlin, the nation's fourth largest producer, reported record first quarter earnings of $2.22 per share, a 13% gain over last year; Lukens Steel reported first quarter earnings of $2.43 per share, more than double last year's first quarter...
...world surplus of cargo and tanker tonnage has knocked the bottom out of the shipping business, plummeted P. & O.'s profits from $29 million in 1957 to $8,400,000 last year. A major culprit in the world shipping slump, says Sir Donald, is U.S. maritime policy, which grants Government subsidies to shipping companies. He complains that Government subsidization of shippers (P. & O. gets no subsidy) "makes it impossible for us to plan operating costs, because it is impossible to form a judgment on what another company will be able to do if that company is receiving Government...
...many builders, the biggest villain of the slump is tight money. Though money has eased somewhat, building plans that would ordinarily be going into effect now have been postponed or dropped because of the difficulty of getting money to back them, even at a high 6% interest. "As long as money is tight," says Alex Bruscino, one of Cleveland's biggest home builders, "the housing business will continue downward." Many builders also insist-despite the Government's refusal to blame the housing slump on the weather-that winter storms badly damaged their business. Says Edward T. Rice, executive...