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