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Chapter II. The Details of Demand

Published online by Cambridge University Press:  26 March 2020

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Extract

This chapter provides the detailed backing to the forecasts summarised in Chapter I, and it also provides an account of the trends of demand in the various sectors in 1963. It begins with fixed investment and exports, and then looks at the consequences first for stockbuilding and then for incomes, employment, hours, prices and so for consumers' expenditure. Finally it summarises past trends in imports and the balance of payments.

Type
Articles
Information
National Institute Economic Review , Volume 27 , February 1964 , pp. 13 - 31
Copyright
Copyright © 1964 National Institute of Economic and Social Research

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References

(1) It is also possible that the price index used for investment rises too slowly in periods when house prices are rising fast. But this is unlikely to be the whole of the explanation.

(2) This is not in fact very different from the estimate in the November Review of 6 per cent. We assumed a rise of at least 15 per cent in other industries and a rather bigger fall in iron and steel and vehicles; but the Industrial Inquiry confirms that the figure for vehicles may have been too low.

(1) National Institute Economic Review, February 1963, page 7.

(1) Britain clearly gained in the first quarter and lost in the second from the affect on her competitors' trade of the dock strike in the United States and the bad weather in Continental Europe.

(1) In addition to the increases shown in chart 8, a number of these groups obtained long-term agreements implying further increases during 1964 and 1965. These were as follows :—Electricity supply : increases of 4.1 per cent from 1st February, 1964, and of 3.9 per cent from 1st February, 1965; further productivity bonuses according to the industry's success. Gas supply : 4.2 per cent from 6th July, 1964, and 4.0 per cent from 5th July, 1965. Local authority manual workers : 3.4 per cent from 1st September, 1964, and 3.3 per cent from 1st September, 1965; additional 7s. a week for 5 years' service from 1st April, 1964. Building (England and Wales) : Labourers' rates : 3.1 per cent from 1st November, 1964, with a reduction from 42 to 41 hours in normal week, and 1.5 per cent from 1st November, 1965. Craftsmen's rates : the increase from 4th November, 1963, was of 5.8 per cent. There will be increases of 4.1 per cent from 1st November, 1964, with a reduction from 42 to 41 hours in the normal week, and of 3.3 per cent from 1st November, 1965.

(1) Gross trading profits of companies, as a percentage of total domestic incomes (a figure which roughly approximates to a profit margin) moved as follows : 1957, 16.3; 1958, 15.3; 1959, 15.9; 1960, 16.5; 1961, 14.8; 1962, 14.2; and 1963, II & III, 14.6.

(2) This forecast uses the relationship set out in R. R. Neild, Pricing and Employment in the Trade Cycle, NIESR Occasional Papers XXI, Cambridge University Press.