The forecasts presented in this paper constitute an attempt by the writer topredict the pattern of the consumption of petroleum products in the UnitedStates during the period of transition from war to peace. Although, inpreparing the estimates, secular trends were not overlooked, greater emphasiswas placed upon considerations of a cyclical character, or upon influenceswhich might be peculiar to parts of the period. The estimates do not extendbeyond the year 1950 because by then conditions in the industry should havereturned to normal.
The consumption of petroleum products is affected, of course, by changes in thecondition of business in general. Before estimates of petroleum consumptioncould be prepared, therefore, it was necessary to predict the pattern ofgeneral business during the period under review, particularly the economicseries that in the past have shown the closest relationships with petroleumconsumption.
It is the writer's view that business activity in this country (as measured byindustrial production) will be higher on the average during the period betweenthe end of the war and the year 1950 than it ever was before during a peacetimeperiod of the same duration. When the war is over, consumers will have savedamounts of money that will be very large as compared with any previousaccumulations. There is little question, therefore, as to the financial abilityof consumers to purchase goods. The production of many durable consumers'goods, such as automobiles, refrigerators and radios, has been completelystopped since early in the war; also, many semidurable and nondurableconsumers' goods have not been available in the quantities or the qualitiesdesired. There is considerable need, therefore, for consumers to purchase goodsafter the war. The important question is whether consumers will purchase goodsin large enough quantities to keep our economy running at a high level. Thewriter answers this question in the affirmative. The mere existence of verylarge consumer savings lends considerable support to this view because, withsuch backlogs of "security," consumers can afford to spend more oftheir current earnings than they otherwise could. Also, several polls have beentaken, which indicate that consumers expect to buy large quantities of avariety of goods. Some of the savings, therefore, probably will go into currentconsumption. Even though this percentage is relatively small, so that the bulkof the funds accumulated by consumers during the war continues to remain assavings during the period under review, spending should be great enough tostart the production cycle and keep it going at a relatively high rate for afairly extensive period.
T.P. 1730