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Information bulletin
(June 1951)

Cefaratti, A. J.
Output, exports set records,   pp. 55-57 PDF (2.0 MB)


Page 55

Output, Exports Set Records
By A. J. CEFARATTI
Chief, Analytical Reports Branch, Program Division
Office of Economic Affairs, HICOG
LATEST REPORTS OF WESTERN          GERMANY'S economic efforts indicate considerable
in-
dustrial expansion despite continuing shortages. Industrial output figures
for April recorded
sizable gains in production with the index (excluding building, stimulants
and food processing)
climbing four points to 139 percent of 1936, a new postwar record.
Total exports in April reached a postwar peak of $275,000,000,* surpassing
imports (by
$15,000,000) for the first time since the war. Basic materials prices dropped
0.4 percent in April
while industrial producer prices and consumer prices rose 1.8 percent and
1.5 percent respectively.
Employment, well above last year's level, continued to gain, but at a slower
rate.
* * *
*    *
IN MARCH AND APRIL, the Western German economy
continued the spring upward trend, but at a pace
somewhat slower than the earlier pronounced rises re-
corded in March. The March industrial production index
rose three points, April labor market developments al-
ready compared with June 1950, and the April increase
in exports and decrease in imports brought the first
positive balance of trade ($19,0100,000) of the postwar
era. The consumer price index, however, rose by three
percent in March and another 1.5 percent in April, and
raw material shortages were frequently reported in
many industries. EPU trade again showed a surplus, but
future policy to be adopted by the OEEC in regard to
the German balance of payments has as yet not been
d etermineld.
Although the revision of the Prohibited and Limited
Industries Agreement (PLI) was anticipated and was
well received by industry, present and potential raw
material shortages loomed to offset immediate industrial
expansion and resumption of hitherto restrictedproduction.
Coal, steel sheets, metal scrap, non-ferrous metals and
sulphur head the list of materials reported in short
supply and affecting many industries, including iron and
steel, electrical appliances, mechanical engineering, ve-
hicle production, fine mechanics and optics.
The Schuman Plan was formally signed in April, but
must be ratified within six months by the parliaments of
each participating country before becoming effective.
The Allied High Commission gave official non-dis-
approval of the Schuman Plan later in that month.
The Torquay trade and tariff negotiations have been
completed, and announcement of concluded agreements
was to have been made in May. Germany's accession
to the General Agreement on Tariffs and Trade (GATT)
might be considered the most important achievement of
the Torquay conference. Most of the original GATT
members had been unwilling to negotiate tariff conces-
sions on products of which Germany was the main
supplier, principally in the chemical field, until Germany
herself could participate in the negotiations.
Of the many programs which have been forwarded to
meet the problems of Western Germany'Is economy, all
are in unanimous agreement on the necessity for finding
immediate and adequate investment funds for the Ger-
man basic material industries on the necessity of ex-
port promotion, and on the urgency for stabilization of
prices and wages. By the end of April, however, the
exact methods to achieve these aims had not been
defined clearly enough to consider drafting of a final
program by the government.
Foreign Trade
The major trade developments in the first quarter of
1951 were the maintenance of total exports at a high
level, the sharp decline from the previous quarter in the
trade deficit with the EPU countries, and the drastic
curtailment of trade with the Soviet bloc.
Western Germany's exports during the first quarter,
including the Soviet Zone, reached $714,600,000, thus
only slightly exceeding the preceding quarter and
doubling the first quarter of 1950. Imports, however,
decreased by 5.2 percent from $941,300,000 in the last
quarter of 1950 to $892,800,000 in the first quarter of
1951 ($616,300,000 first quarter of 1950). Apparently
Western Gbrmany's restrictions on imports from   the
EPU area have not yet affected the import total. There
were sufficient import licenses issued prior to the im-
position of restrictions in February which remained avail-
able for use through March.
On a country of payments basis, the trade deficit with
the EPU area in January-March 1951 was $113,200,000,
compared with $170,300,000 in the previous quarter. This
substantial amelioration was mostly produced by the
rise in exports to the OEEC participating countries both
sterling and non-sterling, and a decline of imports from
the non-sterling OEEC countries from $489,200,000 in the
fourth quarter of 1950 to $448,300,000 in January-
March 1951.
Trade with the Soviet bloc was characterized by
decreasing exports ($27,400,000 fourth quarter of 1950
to $20,100,000 first quarter of 1951) and sharply reduced
imports ($32,500,000 fourth quarter of 1950 to $22,600,000
first quarter of 1951). The same trend in an even more
drastic fashion was noted in trade with the Soviet Zone.
Majors reasons for the sharp cut in interzonal trade in
recent months have been the termination of the Frankfurt
Agreement, the increasing efforts of the Federal Republic
* At official rate of 23.8 cents to the Deutsche mark, DM 1,155,462,000.
INFORMATION BULLETIN
J I NE 1951
55


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