asked the Chancellor of the Exchequer, further to his written reply dated 24 March, Official Report, c. 192, concerning unit labour costs and wholesale prices, and so on, whether he will publish in the Official Report (i) the increase in the price of input materials including fuel and the effect on output prices, all other things being equal, (ii) any evidence he has showing that the product mix was responsible for the lower export figures and (iii) any evidence he has that profit margins improved in home and export markets over this period
(i) The following table provides the required information on input prices:
Year on Year Increase in the Price of Manufacturers' Inputs of Materials and Fuels | |
Per cent. | |
1977 on 1976 | + 15 |
1978 on 1979 | - 1 |
1979 on 1978 | + 16 |
1980 on 1979 | + 20 |
1981 on 1980 | + 14 |
(iii) The absence of a reliable indicator of total unit costs for manufacturing—as opposed to unit labour costs—means that no firm conclusions can be drawn on fluctuations in margins in home and export markets.
asked the Chancellor of the Exchequer, further to his written reply dated 30 March, Official Report, c. 95–96, concerning the increase in unit labour costs, whether he has any evidence that the 10 per cent. increase in the price of exported finished manufactures in the fourth quarter of 1981 compared with a year earlier was wholly or largely due to (a) an increase in profit margins on exports or (b) changes in non-labour costs; and if he will give his assessment of the impact of these two factors and in particular the effect on United Kingdom competitiveness of the contraction of output.
The only information available on manufacturers' costs relates to unit labour costs, for which I would refer the hon. Member to my written reply of 24 March, Official Report, c. 192. Information on profit margins on exports or changes in non-labour costs which would enable me to offer the assessment of the impact of these factors which the hon. Member requests is not available. The productivity gains achieved over the past year in the first stages of the recovery of output from recession have taken output per person hour in manufacturing to a level 4½ per cent. higher than at the previous cyclical peak in 1979, and this has contributed to improved competitiveness.
asked the Chancellor of the Exchequer, further to his written reply dated 30 March, Official Report, c. 95–96, concerning the rise in unit labour costs in 1981, whether the statements made in his fourth and fifth sentences referred to relative labour costs denominated in a common currency; if so, whether the figures were based on weekly or hourly earnings; and whether he will publish in the Official Report a table showing how much of the 10 per cent. improvement was due to the fall in the effective exchange rate between the "end of 1980" and the third quarter of 1981 and how much to other factors.
The statement referred to the index of United Kingdom relative actual unit labour costs compiled by the IMF and published regularly in "Economic Trends". In compiling this index, unit labour costs for the United Kingdom and other countries are adjusted for exchange rate changes and thus, in effect, denominated in a common currency. The labour costs data used in compiling this index are in terms of hourly earnings. The IMF estimates show an improvement show an improvement of around 2 per cent. in United Kingdom unit labour costs relative to competitors measured in domestic currencies between the fourth quarter of 1980 and the third quarter of 1981. The remainder of the improvement in relative actual unit labour costs reflects exchange rate changes.
asked the Chancellor of the Exchequer, further to his reply of 30 March, Official Report, c. 95–96, concerning the increase in unit labour costs in 1981, whether he will publish in the Official Report an estimate of the normal unit margin of profit on sales in manufacturing industry, his estimate of the margin in 1981 in the case of the United Kingdom output and his estimate of the labour and other components of the 10 per cent. increase in unit costs in manufacturing industry in 1981.
Unit wage and salary costs in United Kingdom manufacturing are estimated to have risen by 2½ per cent. in the year to the fourth quarter of 1981. Comparable quantitative estimates of associated movements in total unit costs or profit margin are not available.