year. But, in 1972 and 1973, there was very little change in manufacturing employment even though the rate of growth of the gross domestic product, in constant price terms, and the rate of growth of domestic exports, in quantity terms, were rising again, to about 9% and 6% a year respectively.
Rate of Growth of the Economy and Vacancies in Manufacturing Industry
94. In view of the rapid growth of both the gross domestic product, in constant price terms, and of domestic exports, in quantity terms, in 1969, it might be expected that there would also be a sharp increase in the number of vacancies in manufacturing industry at this time, and, as will be seen from Table 37 this was, in fact, the Because the vacancies figures are subject to the same limitations as those for manufactur- ing employment they provide only a broad indication of changes in the pressure of demand for labour.
case.
Reported Vacancies in Manufacturing Industry*, 1968-1973
rather limited number of industries and move- ments in these rates may not adequately reflect movements in manufacturing industry in general. But it is significant that the rate of growth of wage rates in these industries did ease consider- ably after 1971.
Increase in Nominal Wage Rates in Manufacturing Industry* and in the General Consumer Price Index, 1969–1973
Table 38
Increase in
Increase in general
consumer
nominal
wage
price
rates
index†
(%)
(%)
Twelve months to Sep:
1969
14.2
2.3
1970
17.6
6.4
1971
15.6
5.3
1972
10.6
4.4
Table 37
Number
As a % of manufacturing employment*
1973
11.3
15.0
As in Sep:
1968
8,269
1.8
1969
18,419
3.5
1970
20,647
3.8
1971
19,005
3.3
1972
18,287
3.2
1973
8,904
1.5
* in establishments registered with or recorded by
the Labour Department.
95. In very general terms, the vacancies figures appear to be consistent with the employ- ment figures shown in Table 34 in that they, like the employment figures, indicate that the pres- sure of demand on the labour market increased in 1969 and that it was easing off by 1972 (and certainly by 1973).
Rate of Growth of Manufacturing Wage Rates
96. If the pressure of demand for labour was easing in 1972 then the rate of growth of nominal wage rates could be expected to have fallen off as a result. Information on manu- facturing wage rates is collected in respect of a
* industries covered: cotton spinning, weaving and knitting; garments; rubber footwear; plastic flowers; enamelware; metal torch cases; elec- tronics.
† based on 12 month averages of the index.
97. It has already been indicated that there was no significant change in manufacturing employment in the twelve months to September 1973, and that manufacturing wage rates, in general, could have increased by about 11% in this period. Given also that domestic exports increased, in quantity terms, by 6% at about this time whilst the prices of domestic exports and of raw materials both increased by as much as 15%, it would seem possible that there was an increase in labour productivity in manufac- turing industry and in the proportion of funds internally generated by manufacturing firms. available for investment in fixed plant and machinery. This would appear to be consistent with the sharp increase in imports of capital goods, in quantity terms, and in investment in plant and machinery, in constant price terms, during 1973.
98. The likelihood that the rate of growth of wage rates is strongly influenced by the degree of pressure on the labour market helps to explain why there was no significant increase in the rate of growth of wage rates in manufacturing in-
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