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Manufacturing Output

Volume 35: debated on Thursday 27 January 1983

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asked the Chancellor of the Exchequer if he is satisfied with the recent performance of the economy in terms of gross domestic product growth and output by manufacturing industry.

Recent figures, particularly for manufacturing output, confirm that there was a hesitation in the recovery last year, partly reflecting the unexpected length and depth of the world recession. But with lower inflation, improved competitiveness, and the prospect of some growth in the world economy, the outlook for 1983 is for a modest rise in output.

As the economy clearly did not bottom out in April 1981, does my right hon. and learned Friend feel that the latest CBI proposals understate or overstate the need for new resources in the economy?

Contrary to what my hon. Friend says, there has been growth in output in the economy since the second quarter of 1981. Indeed, growth during that period, as I have already said, exceeded that in all seven summit countries except Japan. I shall, of course, consider the representations made by the CBI.

Is there nothing that can pierce the right hon. and learned Gentleman's complacency? Is he not aware that last week's disastrous output figures show that house completions were at their lowest level since 1947, that the output of commercial vehicles was at the lowest level since 1953 and that steel output was lower than in Poland? As the output of manufacturing industry has fallen by 2 per cent. since the right hon. and learned Gentleman last assured me that we were at the end of the recession, would he care to tell the House when he expects us finally to reach the end of the recession?

The hon. Gentleman must take account of the factors that I have already pointed out. There was growth in output between the first three quarters of last year and the first three quarters of the preceding year. During last year there was a 4 per cent. growth in real demand in our economy. There is expected to be a growth in real demand in the economy in the year ahead. The key factor is for British manufacturers and producers to go on improving their competitiveness so that British goods fill a larger rather than a smaller share of that market.