Fourth quarter led 1978 earnings surge

It took a long time, and the reward may not last too long. But for the moment, chemicals are a very good business. Confounding all predictions of a year ago, the U.S. chemical industry gathered steam in the first three quarters of 1978 and then let loose with a real winner in earnings in the final quarter of the year. The boom pace has continued in the first two months of 1979. The outlook for future months clouds considerably, however. The industry has shown serious signs of overheating in employment, workhours, productivity, and even in plant capacity use in some areas. For the first time in several years, product shortages are cropping up, with talk of inventory building. Spot-market prices are climbing for some important products, notably the basic aromatics. None of this hurts profits, though. For fourth-quarter 1978, after-tax earnings for the 40 largest basic U.S. chemical producers gained 33% overall on an unusually ...