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11657-Economic Survey-Galley 14

Building and Fixed Investment

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74. The building and civil engineering industries account for well over half of all fixed investment at home. The size of the labour force on con- structional work has remained very stable during the last three years. There has been nevertheless a steady, if moderate, increase in the amount of work done. The evidence is that productivity has increased by some 4 to 6 per cent. a year, an improvement that may be attributed both to the industry settling down after the rapid expansion of the immediate post-war years and to wider realisation of the need for greater efficiency both by manage- ment and workers. Because of this improving productivity and of general progress in the economic position last year, it was possible to relax somewhat the further restrictions on investment imposed after the devaluation of sterling. Within the total of building investment there was a fall in the resources devoted to repairs and maintenance and a substantial increase in new buildings.

75. Material supplied should be sufficient in 1951 to enable building output to go on rising at least as fast as in recent years, but the defence programme will have a considerable impact on the industry. It provides for an increase in expenditure on works and buildings for defence purposes (including indus- trial building) from just over £80 million in 1950-51 to £145 million in 1951-52 —an additional demand somewhat greater than the likely increase in total output. Furthermore, there is a serious shortage of architects, quantity surveyors, draughtsmen and other works staff, and defence building is likely to interfere with some types of civil work which require these particular skills.

76. Investment in building is subject to licence or authorisation, and the Government can therefore control the use of building resources. But the planning and execution of most building works take a considerable period, and to be effective the control of investment programmes must look far ahead. The investment programme for 1951 was prepared and approved in 1950, and account was then taken of the probable increase in the total output of the building and engineering industries. Much of the work allowed for in this programme, particularly that to be carried out in the early part of 1951, was licensed and, in some cases, even begun during 1950. This means that, if the requirements of the defence programme are to be met, it will not be enough merely to postpone the granting of licences for new civil work. The regional machinery which fixes starting dates for approved build- ing work will therefore be used to give priority to specific defence projects as they come forward, the start of other building in the localities concerned being deferred where this is necessary to avoid overburdening local building

resources.

77. Gross fixed investment for civil purposes in 1950 is estimated at £2,176 million, compared with £2,120 million in 1949 (Table 8). A reduction will be necessary in 1951, and therefore some of the programmes both for buildings and plant and machinery which were originally approved in anticipation, of an increase in the total will not now be carried out on time. The total investment programmes for 1951 and 1952 are being re-examined, and until this examination is complete, it will be impossible to say how large the cuts will be, or where they will fall. It is not intended to reduce the housing programme as a whole, but there may be some interference with the com- pletion of local programmes.

Textiles

78. Further expansion of production was recorded in all the main sections of the textile industries in 1950. Table 9 shows that the increase was most marked for rayon: it amounted to 48 per cent. over 1949 for staple fibre, 16 per cent. for continuous filament yarns, 38 per cent. for spun rayon and mixture yarns, and 20 per cent. for rayon cloth an mixtures. Production of cotton cloth expanded by 6 per cent. and of wool cloth by 21 per cent. Exports of woven wool piece-goods were larger than in 1949 owing to an improvement in the last half of the year. Exports of cotton piece-goods fell, mainly as a result of reduced trade with the Colonies. Exports of linen piece- goods rose from 39 million to 49 million square yards, and almost all the increase went to North America.

79. The outlook for 1951 is clouded by prospective raw material shortages, which will almost certainly lead to a reduction in output in some parts of the industry. Rayon production, for instance, is dependent on sulphur, supplies of which have been drastically reduced in the first quarter of the year. Pro- duction of nylon, however, should at least be maintained in 1951, and in addition there should be small quantities of other synthetic textile fibres of 587 production of which is now beginning. The world shortage of raw cotton, particularly American cotton, will continue at least until the 1951 crop

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