§ At home as abroad, the need is for steadiness and resolve.
§ Government spending is being restrained. The public sector deficit, as a percentage of our domestic product, is now one of the smallest in the industrialised world. Monetary growth is towards the middle of the eight to 12 per cent. target range; and inflation, at 5 per cent., is lower than at any time since 1970.
§ Last year saw a surplus on our balance of payments current account of some £4 billion. In 1983, too, we now expect a significant surplus. Total official external debt now stands at around $12 billion compared with $22 billion when we took office. This overseas debt burden is now smaller in relation to our trade than at any time since the second world war.
§ In our own economy domestic demand has been growing—at almost 3 per cent. a year in real terms—since the spring of 1981. This is a stronger growth of demand than in most other industrial countries. Indeed, in the industrial world as a whole demand has tended to fall. With this weakness in overseas demand and a rise in our imports, total output in this country increased last year by only 0.5 per cent. This year we expect domestic demand to grow by over 3 per cent. and output to rise by some 2 per cent. This is likely to be in line with, or a little faster than, the projected growth in world output.
§ In the last quarter of 1982, output in the construction industry was 6 per cent. higher than a year before. In the three months to January housing starts were more than 13 per cent. up on the previous quarter. And for manufacturing industry too the prospects look better. After a slight fall last year, the current evidence suggests a rise in 1983. Figures published today show a 2½ per cent. rise in manufacturing production in January, which follows a 1 per cent. rise in December. All these are clear indicators of recovery, and should be welcomed in all parts of this House.