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The Economic Situation: Annual Review : Chapter IV. Industrial Production

Published online by Cambridge University Press:  26 March 2020

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A year ago(1) it was expected that industrial production in 1969 would be some 4 per cent above the average for 1968. This was based on the general forecast for the whole economy, which on the basis of unchanged policies predicted a rise of 31 per cent in GDP. In the event, GDP rose some 2 per cent only and the advance in industrial activity was also consequently slower than expected, probably only about 2½ per cent (table 1). Within this general framework the rate of growth of manufacturing was some 3½ per cent, that of the electricity, gas, and water industries about 6½ per cent, but there were considerable setbacks in the fields of mining and construction. The production indices for these last fell 6½ and 2½ per cent respectively from 1968 to 1969.

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Articles
Information
National Institute Economic Review , Volume 51 , February 1970 , pp. 47 - 58
Copyright
Copyright © 1970 National Institute of Economic and Social Research

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References

(1) National Institute Economic Review no. 47, February 1969, pages 54-63.

(1) The 7 million working days lost equal, on average, 0.3 days for each member of the labour force. A strike in one plant, or in one industry, may of course affect production of workers not directly involved as well. The extent of this indirect ‘multiplier’ effect depends on the nature and duration of the dispute, and on the size of the stocks of the products of the striking workers held by consuming industries. Works holding coal stocks amounting to one month's requirement are not hit by a coal strike lasting less than a month; on the other hand, assembly plants, which usually do not hold any large stocks of parts and components, can be made redundant by a short strike of one of their suppliers.

(1) Average 12 months as compared with 16 months in Germany. The Times, 31 December 1969.

(2) ‘The demand for domestic appliances’, National Institute Economic Review no. 40, May 1967, pages 44-54.

(1) By value. An increasing part of vehicles trade leaves the producing country in ‘knocked down’ form and measurement by number of complete cars becomes less and less relevant.

(1) The turnover rate in this context indicates the relationship between the gross tonnage under construction at a given date and the completions in the following twelve months. At the end of September 1968 there were about 1.5 million tons under construction in United Kingdom yards, and in the twelve months ending September 1969 completions amounted to about 1 million tons; this is a 66 per cent rate of turnover. In the same period West German and Swedish yards reached a turnover rate of about 100 per cent, and the Japanese about 180 per cent.

(1) W. S. Atkins, and partners. ‘The strategic future of the wool textile industry’, HMSO, 1969.

(2) ‘Cotton and Allied Textiles : Report on present perform ance and future prospects’, Textile Council, Manchester, 1969.

(1) Two additional points are worth noting : (1) There is now a worldwide shortage in coking coal and coke. If supplies were available, the NCB could, probably easily, export significant further quantities, but at present there are no such supplies. (2) The British situation is very similar to that in Germany; a joint study by three German research institutes (of Berlin, Köln, and Essen) concluded : ‘By 1972 the outlet possibilities for West German bituminous coal will have exceeded output (about 112 million tons/year) in that year. In 1969, the difference can be made up by depletion of stockpiles; by 1970, however, existing stockpiles will no longer be sufficient. The greatest difference (4.9 million tons) is to be expected in 1971; not until 1973 would the expected outlet possibilities be less than output for the same period.’ Deutsches Institut für Wirtschaftsforschung, Berlin, Economic Bulletin, no. 12/1969, page 102.

(1) The three new refineries are those of Shell at Teesport (5.3 million tons), of Gulf at Milford Haven (3 million tons), and the Lindsay refinery at South Killingholme (just under 3 million tons). Furthermore, the Phillips refinery at North Tees, whose 5 million tons capacity had been reduced by fire damage in 1967 to 1 million tons, was restored to its original capacity in 1968. Total United Kingdom capacity early in 1969 was 96 million tons.