There is not much doubt that total output stopped falling around the middle of 1981 and that there has been some increase since. But it is not easy to say how large the increase has been. This is both because the three methods of measuring GDP give different results and because the evidence changes as the figures are revised. Table 1 shows the three different estimates from the first quarter of 1981 as they appeared in the last three sets of National Accounts.

It is always difficult to distinguish the trend of output in the early months of the year, as much depends on the weather. This year, it seems fairly clear that relatively mild conditions in January in a number of countries, notably the US and West Germany, contributed significantly to recovery both in industrial production and, more especially, in construction from the depressed levels of the previous quarter. But it is not possible to isolate this influence on the statistics from that of falling interest rates or as yet to judge how far it may have been balanced, in terms of the first quarter as a whole, by unseasonably cold weather later on. Gratification at what seems on the face of it to have been an encouraging start to the year must be tempered by reservations about its reliability as an indication of what is to follow.

This note continues a series of articles by tabulating for the past five years actuals and the National Institute's one-year forecasts for the world economy as published each February. For the more important variables results during this period are compared with those achieved in earlier groups of years, with particular reference to the two periods in which steep rises in the price of oil were followed by recession. In addition, account is taken of the performance of February forecasts for two years ahead, which first appeared in the Review in 1979.

Much was written about the potential benefits and costs of North Sea oil when production had scarcely begun; for example, Hamilton (1978), Johnson (1978), Robinson and Morgan (1978) and Page (1977). In recent years, with concrete experience to draw on, there has been much argument as to the effects of oil on the British economy: in particular, whether, as argued by Forsyth and Kay (1980), a structural change was a necessary consequence, involving a relative decline in the manufacturing sector. This debate includes contributions from Richardson (1980), Worswick (1980), Barker (1980), Brooks (1981), Eastwood and Venables (1982) and Byatt et al. (1982).

The National Institute recently published a study of comparative labour productivity in the non-service sectors of the British, American and German economies: agriculture, extractive industries, manufacturing, construction, public utilities and transport and communications. The present paper extends this work by measuring and analysing Anglo-American labour productivity differentials in the retail trades. Thus it marks our first step into the service sector proper, which accounts in the United Kingdom for one half of both GDP and employment, and in the United States for nearly three-fifths. The extent and significance of international productivity differences in services have been almost entirely neglected in the past, largely because the technical problems posed by productivity measurement in service sectors are even more complex than those encountered in industrial activities. One exception was a study of comparative productivity in distribution relating to the beginning of the 1950s, the methodology of which is similar to our own.