G.F. 323
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23.
real average annual rate of growth of 8% in the gross domestic product.
per annum
In consequence, by the early seventies, the excess supply of property
resulting from the 1961 to 1965 boom was exhausted, and there was
actually an excess demand. The construction industry reacted to this
excess demand at a time when the construction labour force had already
been reduced. So, because of the need to attract labour back into
construction, particularly from manufacturing, there were unprecedented
increases in construction wages in the region of 30%
during 1970 and 1971. These increases were reflected in property prices,
thus, increasing expectations of further price increases; and these
expectations themselves added to demand. Some of the excess demand for
property was discouraged as a result of the higher prices. On the other
hand, higher prices also stimulated construction companies to place large
orders for construction machinery. But, the gradual arrival of this
machinery coincided with the recession in 1974 and 1975 which obliged
management to reduce costs by more efficient use of labour and labour
had every incentive to respond. Thus capacity of the industry increased
substantially. Although building and construction activity increased
during these two years, these increases did not take up much of the
substantially expanded capacity.
*
+
Building and construction 1975 to 1976
48.
The economic recovery in the second half of 1975 and in 1976
renewed prospects for the property market. The excess capacity in the
construction industry made possible an increase of 40% in real terms in
building and construction activity between 1975 and 1976 (to give average
annual rate of increase of 16% between 1969 and 1976 compared with 7% in
real terms for the gross domestic product). The fact that between 1961
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