In the past two months, the Government has again tightened credit. In the industries producing durable consumer goods, the pressure on resources began to ease early in the year. Investment in stocks probably reached its peak in the first quarter. Since then exports seem to have lost their momentum. If this continues, the growth of demand is likely to slow down. But stagnant exports would leave the balance of payments precarious.

World exports of manufactures have risen rapidly in the last decade—indeed faster than world manufacturing production (chart 1). There were checks in 1951–53 and in 1958; even so the yearly rate of rise since 1950 has been 9 per cent in value, 7 1/2 per cent in volume. The pattern of this trade has been changing, particularly in the last five years: markets have grown faster in the industrial countries than in the less developed parts of the world (chart 2). Since 1954, in value terms, the exports of manufactures to the United States and to OEEC countries have been rising at an average rate of 17 per cent and 10 per cent a year respectively; to Latin America and the sterling area, only 3 1/2 per cent and 4 1/2 per cent.

In discussions of defence policy and of disarmament there are often references to the economic aspects of defence expenditure. This article is intended to provide a background to such discussions. It is a factual and statistical analysis of the level and pattern of defence expenditure over the past ten years. The sources and methods used in the estimates are described in an appendix.