§ 28. Mr. Knoxasked the Chancellor of the Exchequer whether there have been any further signs that the economy is recovering from the recession.
§ Mr. LawsonYes. In the first quarter of this year total output grew by about 0.5 per cent. and was some 3.5 per cent. higher than its spring 1981 trough. Industrial output continued to grow in April and manufacturing production is also rising. Last year's destocking has now turned round into modest restocking and consumer demand remains buoyant. The CSO's cyclical indicators, the June CBI inquiry and most economic forecasts all point to continued growth.
§ 29. Mr. Winnickasked the Chancellor of the Exchequer when he now expects a substantial recovery of the economy.
§ Mr. LawsonLatest official estimates suggest that GDP in the first quarter of this year was already 2.5 per cent. higher than a year earlier and 3.5 per cent. higher than the trough in mid-1981. The forecast published with the Budget foresaw further growth of 2.5 per cent. between the first halves of 1982 and 1983.
§ 37. Mr. Maxtonasked the Chancellor of the Exchequer when he expects any recovery in the economy to be reflected in an improvement in investment and a reduction in unemployment.
§ Mr. LawsonThe Government's success in reducing inflation and interest rates provides the foundation for a sustained recovery in investment and activity in general. Total fixed investment in the first quarter of 1983 was 2.5 per cent. higher than in the same period in 1982, and the financial statement and Budget report included a forecast172W that investment would grow by a further 3.5 per cent. over the next 12 months. Further moderation in wage settlements should help produce an improved outlook for jobs.