The following text was automatically extracted from the image on this page using optical character recognition software:
4 TEXAS BUSINESS REVIEW
small-manufacturing employment was off 2.3% and
miscellaneous freight carloadings 0.2%.
The movements of all six major indexes of Texas
business activity in recent years are significant not only
for the light they shed on general business conditions
but also for what they show about particular sectors of
the State's economy. Furthermore, an analysis of these
movements is necessary in any appraisal of current
business and economic conditions.
The index of sales of Texas department stores pre-
sented on page 15 of the REVIEW shows a clear cyclical
recovery from the depression year of 1932 to 1937. The
60 to 70%, increase in sales during this period of five or
six years was accompanied by a mild rise in prices.
Since 1942 department store sales in Texas have gone up
150%. This advance was fairly steady up to last year
after seasonal irregularities were removed. Last year
saw a continuance of this upward trend in dollar sales
but there were wider fluctuations in the figures reported
from month to month. During the war period a sizable
fraction of the increase in the seasonally-adjusted index
of department store sales has been due to the inflation of
prices. Sales in terms of physical volume have not risen
nearly as rapidly as the index. Most analysts believe
that developments in the price field will continue to be a
determinant of department store sales in Texas and else-
where for some time to come.
The index of miscellaneous freight carloadings in the
Southwestern District followed a different course. Car-
loadings remained at their depression low from 1932 to
1935, recovered rapidly in 1936 and 1937 .(a 40% in-
crease),.sank back again to depression levels in 1939
and 1940, and then began a sharp advance (a 142%
gain) which extended into the early months of 1943.
The next 30 months up to V-E Day the index showed
fairly wide seasonal fluctuations but averaged more than
20% above the 1930 base period. Following the end
of the war in Europe and Asia, carloadings dropped
almost 50% and have bounded back in the past three
months to their 1930 level. The future course of this
index largely depends on what happens .to business in
this area in the next few months and years.
The least erratic of the six mnaj or indexes has been the
electric power consumption index. Although it has not
been directly affected by inflation, electric power con-
sumption moved steadily upward from 1932 through
1941 and at a more rapid rate from 1942 through the
early months of 1945. Since February of that year the
seasonally-adjusted index has declined 14.7%. Ljke
the upward movement in this index, the down-turn has
been fairly smooth but decided.
The movement of the index qf runs of crude oil to stills
in Texas has also followed an even pattern. The in-
crease in this index from 1932 through. 1941 (190.4%)
was more rapid than the rise in the index of electric
power consumption (128.7%) during the sam~e period.
However, during the war years 1942-45 the index for
crude oil runs advanced only 61.1%, as compared with a
94.5% increase in the electric power consumption index
for the State. Since the break in the upward movement
(February, 1945), the index of runs of crude oil in Texas
eased off gradually~ (8.5%) at first, dropped suddenly
(23.5%) in September and October, 1945, and recovered
by January of this year to a point fractionally higher
than its previous all-time peak (February, 1945). The
present position of this index is therefore highly fav-
orable.
Fluctuations in the index for manufacturing employ.
inent in Texas are naturally more restricted than fluctua-
tions in the other major indexes. The continuous index
prepared by the 'Bureau indicates a gradual rise of
144-5% from the low point of the depression (March,
1933) to the wartime high (December, 1943.) From
there the index moved slowly downward (22.9%)
through August, 1945, when it suddenly fell 23.1% in a
period of 60 days. Since that time the index has risen
slightly despite strikes, reconversion, and demobilization.
From a percentage standpoint the greatest fluctuations
among the major Texas business indexes have appeared
in the index of manufacturing pay rolls. Starting from
a depression low in 1932, the index rose more than 70%
prior to the outbreak of World War II in Europe. The-
index then rose rapidly until the fall of 1943 when pay
rolls were three times as large as they were in 1939.
This level was maintained through the first quarter of
1945 when the index dropped to little, more than half
its wartime peak in seven months. Since that time pay
rolls in Texas industry have .gone up 10%. The resolu-
tion of the present wage-price controversy will have an
important bearing on subsequent changes in this index.
Activity in the trading field has continued high
throughout the winter months. Retail sales of inde-
pendent stores experienced a seasonal decline of 34.7%
between December, 1945, and January of this year, but
the total was still 14.1% above the sales in January a
year ago. Credit sales rose somewhat in January, 1946,
over the previous month but represented only about 40%
of the business done by department and apparel stores
scattered over the State. The ratio of collections to out-
standing accounts likewise stayed up around 66%. In
January, 1946, postal receipts, another indicator of trade
and general business activity, were down 21.3% season-
ally and 6.1% 'for the 12-month period.
The several production series tell a somewhat different
story. Crude petroleum production was up 6.1% for
the month but down 4.3% from production in January a
year ago. The value of building permits in 44 Texas
cities in the first month of this year was $26,248,692 as
compared with $38,687,102 in December, 1945, and
$3,325,652 in January, 1945. Dairy production over the
State shot up 52.1% between the last month of 1945 and
January, 1946., It was also 36.3% above the total for
January of last year.
Agricultural activity showed declines in both the one-
month and 12-month comparisons. January, 1946, cash
farm income was off 4.2% for the month and 41.8% as
.compared with January, 1945. Corresponding decreases
in livestock shipments were 21.4% and 15.1%.
In the financial field business failures remained neg-
ligible (one for January, 1946), while there was a rush
of new incorporations. During the first month of 1946,
172 domestic corporations and eight foreign corporations
were chartered in Texas, as against a total of 137 in
December, 1945, and 44 in January, 1945.
4
TEXAS BUSINESS REVIEW