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Volume 940: debated on Monday 28 November 1977

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asked the Secretary of State for Trade what has been the movement in the terms of trade for machinery and transport equipment since 1970; what has been the decline in relative volume over the same period; what relation there is between the two; and what are the forecasts for 1978 in the two indices.

The figures required are given in table F4 of the November issue of the "Monthly Review of External Trade Statistics", a copy of which is in the House of Commons Library. No simple relationship exists between changes in the terms of trade and relative volume. Movements in relative volume will be influenced by factors such as home and overseas activity and also price competitiveness, for which the terms of trade index will provide an approximate guide only in view of differences in products exported and imported. No forecasts of the terms of trade and relative volume indices for machinery and transport equipment are available for 1978.