Busy Plants: Many Factories Work At Capacity, and Fears Of Shortages Crop Up --- With Many Producer Prices Climbing, Some Analysts Warn of Inflation Ahead --- Doubts About Fed's Course
ROTAN, Texas -- Inside National Gypsum's Co.'s old wallboard plant here, workers labor round-the-clock in a thin gray fog of gypsum dust -- stopping only for needed repairs.</br></br>Wallboard streams off the production line. Just three weekends ago, the plant shipped a record 118 truckloads, a third more than normal. "It was hard to even get that many trucks, but we did it, and everybody worked beautifully together," says Tommie Underhill, the plant's sales order supervisor.</br></br>The Rotan gypsum factory is but one of many plants around the country working at capacity to meet unexpectedly robust demand for products as varied as plastic pipe, corrugated cardboard, microprocessors, computer memory chips, flat-rolled aluminum, specialty steels and iron castings. Strong demand is increasingly triggering sharp price increases in different sectors of the economy and, in a few cases, fears of shortages.</br></br>Some experts worry that plants operating so feverishly and certain producer prices rising so rapidly may indicate that the economy is edging into a new, inflationary stage. "I think people ignore these (producer) price increases at their own peril . . . . These are the traditional foundations on which high inflation is built," says Michael K. Evans, of Evans Economics in Washington.</br></br>Mr. Evans recently increased his inflation forecast, partly because of the higher prices that manufacturers are paying for raw materials and other goods. He now predicts that in the 1984 second half, the consumer price index will rise at an annual rate between 6% and 7%, up from his previous forecast of 5% to 6%.