Cefaratti, A. J.
Economy shows greater vitality, pp. 43-45 PDF (2.0 MB)
Economic Review Economy Shows Greater- Vitality By A. J. CEFARATTI Chief, Analytical Reports Branch, Program Division, Office of Economic Affairs, HICOG The economy of Western Germany during the months of October and November reflected a vitality which surpassed the strength of the autumn level in 1950. The most pronounced amelioration was found in Ger- many's foreign trade and payments position. At the end of 1950, Western Germany had a foreign trade deficit of $723,000,000* and a cumulative debit with the European Payments Union (EPU) which exceeded Germany's EPU credit quota and forced her to restrict imports drastically in order to check the mounting deficit. In contrast to that sizable trade deficit and the EPU payments crisis, Germany by November 1951 had not only registered several monthly trade surpluses but had also tallied her first, though small, EPU cumulative credit, and was contemplating reliberalization for the beginning of the new year. Reports of difficulties in coal and raw material supplies persist but have lost much of the force of the long publicized critical shortages. Industrial production has expanded about seven percent above the Sep- tember-November 1950 level, and employment has risen in manufacturing as a whole. The number of registered unemployed, which has decreased steadily since January 1951, showed the first autumn increase at mid-November. This increase in unemployment, as well as its distribution among the states and occupations, however, repeats the seasonal pattern of 1950. Prices in general rose again slightly in November, with the most important increases in the agricultural sectors. Record grain and sugar beet harvests are estimated for 1951, with another bumper potato crop. The food supply is adequate for current requirements. * * * * * Western Germany's foreign trade during October was characterized by This review (1) a distinct reaction in the import tributions sub trend to September's unusually high officers in the level and (2) an export figure -con- Affairs and t1 siderably lower than expected in view Affairs, HICOC of recent developments in production. The Federal Statistical Office an- nounced belatedly that because of a new system for re- porting exports by. customs houses effective Oct. 1, the figure reported for that month is not accurate. It is certain only that minimum exports for October were $302,000,000. The import figure is not affected by this new isystem. The October import figure was, to a large ext ent, a reaction from the abnormally high September imports, and for purposes of analysis, the two months may be treated as a single unit. Average monthly imports of 8t328,000,000 for this period were substantially above the monthly level for the June-July-August period. Increases in the number of import licenses issued indicate an effort by the Federal Government to raise gradually the level of imports for the two months remaining before contemplated reliberalization on Jan. 1, and thus prevent a sharp rise at the first of the year. October imports found the largest percentage reduc- tion in the finished goods sector - a reaction to the high percentage increase in September when importers at- tempted to avoid special tariff increases effective Oct. 1. Food imports were down considerably. Raw materials imports fell only slightly. The West German EPU monthly accounting surplus in November was $9,600,000, which for the first time effected a cumulative surplus position, although only by the negligible sum of $350,000. November balance of DM 3,058,290,000 at official rate of 23.8 cents to the Deutsche mark. r is 1 Jmittei ! Offic .he 0 G3. payments will probably be in the based on con- range of $30,000,000 to $40,000,000 ,d by reports due to the indicated rise of other ce of Economic accounts. This undoubtedly represents Iffice of Labor a real trade surplus, especially con- sidering adjustments which may be necessary because of the revised ex- port recording procedure. This trade surplus may mean that imports have continued, on he average, to-lag behind the goals accepted by the OEEC. Industry Industrial activity reached a new postwar record, al- though barely above the previous high point in April- May 1951. Western Germany's October industrial pro- duction index is at 139.5 percent of the 1936 level- a monthly rise of four points, and 10 points above October 1950- with' another substantial increase indicated for the November index. Consumer goods production ac- counted for a large part of the October increase, with major rises in shoe and leather production. There were also substantial increases in heavy industry. Postwar peak production was registered for the iron and steel industry, electrical equipment, optical and precision instruments, crude oil, coal and coal by-produc s, electricity and gas. Vehicle production was up 14 per- cent, but raw materials, especially light sheets, are in short supply. The coal shortage question in Western Germany has drawn the efforts of government, labor and business alike for more than a year. Although coal remains generally in tight supply, the principal problem seeiis to lie not in adjusting allocations but in increasing pro- duction and enforcing equitable retail distribution. Favor-, able developments in November were the increased coal output and the decisions of the Council of the Inter- INFORMATION BULLETIN JANUARY 1952 43
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