Chapter III. The World Economy

Extract

After three quarters of gradually accelerating recovery, the total output of the OECD countries reached a new peak in the first quarter of 1981—about ½ per cent higher than it had been a year earlier. Demand has revived rather less for consumption (including public authorities' current spending) than it has for investment (table 1), but probably for services rather than goods, as industrial production remained well below its peak (table 2). Geographically the recovery was concentrated in North America and in Japan; in Western Europe output remained depressed, particularly in the industrial sector, and there was not much sign of revival in the second quarter, when a slight fall in output in the United States was probably sufficient to halt the upturn in the OECD area as a whole. There are signs of export-led recovery in West Germany and of levelling out in the United Kingdom, but the Italian economy seems to have turned downwards again and French industrial output remained depressed in the second quarter.