In spite of Tory optimism, the outlook is black

Hire purchase. controls removed. Cheaper credit. A lower Bank Rate. And now a decision to increase investment in the public sector of industry in 1959-60 by approximately 8 to 10 per cent., or by £125 to £150 million.

According to the Press these moves will stop the fall in . production and bring about a new expansion. Will they?

There is no doubt that there has been a fall in production. Here are the percentage changes in production this year 2) ‘New factory approvals in the third quarter were just over 30 per cent. less than a year ago’ (Financial Times, NovLa ember 7).

Another sign is the fall of 15 per cent. in private investment next year, as shown by the Board of Trade’s inquiry into manufacturers’ investment intentions.

There is clearly not the slightest ground for optimism on anyone’s part next year—least of all on the part of the 514,000 unemployed. , On the contrary, with investment being cut all over western Europe, and in the primary producer countries as well, the

Tas NeEwsLpeTTER economic outlook is black.

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‘The November issue of the Treasury BuHetin for Industry “The volume of goods exported in the first five months fof 1958] was 3 per cent. lower than a year earlier, but in JuneAugust the decline was 7 per cent.

“So the rate of fall is accelerating—a consequence of a marked change of trend in exports to primary producing markets and particularly to the Sterling Area.

‘These last were 7 per cent. lower {'an 1957 in JuneAugust compared with 2 per cent: higher in the first five months.’

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“That is the true picture—an ‘accelerating’ decline, spurious optimism of interested government politicians in an election year should be ignored.

And this decline will not be halted by cheapened hire ; ; purchase or by increasing public investment by 8 to 10 per cent. next year.

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The reality is a declining economy, declining export markets, overproduction, rising unemployment—and the prospect of a steeper decline before long.