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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