In terms of total output, 1965 appears just as much a ‘stop’ year as 1961. Indeed the movement of output since 1962 matches closely the movement in the last recovery from 1958 to 1961, (chart 1). It is true that the 1965 figures are incomplete, and liable to revision; but the revisions are not likely to be massive enough, nor the rise in output in the fourth quarter big enough, to invalidate the general comparison. This year, there is no great conflict of evidence arising from divergent movements of the output, incomes and expenditure measures. We estimate that output in the fourth quarter of 1965 was about 1½ per cent higher than a year earlier; at most the figure is unlikely to be above 2 per cent, which was the rise during 1961.

This chapter provides a more detailed account of developments in individual sectors in 1965, and presents supporting material for the forecasts. It deals first with the estimates of output at the turn of the year, then with exports and investment. The next section is on incomes, prices, and consumers' expenditure, and following that there is a section on employment, unemployment and the labour force. Finally, there are sections on imports and the balance of payments.

The index of industrial production rose in the first quarter of last year, dropped back in the middle two quarters, and then (with a jump in the December figure) it recovered in the fourth quarter back to the level it had reached in the first. There is evidence to suggest (page 10) that it may have risen further in the first quarter of the year. Year-on-year, from 1964 to 1965, industrial output went up almost 2¾ per cent. Industrial production in Scotland (table 23) rose about as fast as in the United Kingdom as a whole; in Northern Ireland, on the basis of provisionally estimated figures it rose faster—by about 6 per cent.

The year 1965 was on the whole again a good year for world production, with the real gross national product in industrial countries rising by just over 4½ per cent (table 54 below). The overall rate of expansion was slightly lower than in 1964, because although growth in North America was faster than in 1964, it was balanced by the slowing down in Japan and most European countries, notably the United Kingdom, France and Germany.