The first quarter was probably the bottom point of a stock-cycle—a cycle which had been interrupted at the end of last year by an unintended rise in manufacturers' stocks of finished goods; these stocks seem to have been run off at the beginning of the year. Apart from this swing in stocks, there was very little change in real terms, between the fourth quarter and the first: we take the view that the increase in consumers' spending on durables in the first quarter was nearly all seasonal (page 7). So the year 1962 began with national output, industrial production, and also the volume of exports of goods and services all roughly where they had been two years earlier, at the end of the brief 1959 boom.

This article examines trade and production figures for the Common Market countries before and after 1958. The Common Market can be said to have come into effect on 1 January 1959, when the first reductions were made in the internal tariff. But there was not in fact a great deal of discrimination against outsiders before the second set of reductions, on 1 July 1960. So far, these tariff changes do not seem to have had any great effect; other factors must have overborne them.

For the past four years estimates of home and foreign orders have been published which, by and large, cover the capital goods sector of the engineering industry. (This is the sector which produces to order.) Home deliveries from this sector make up a large part of industry's investment in plant and machinery; export deliveries have usually been more buoyant than total exports. If these orders figures could be used to predict turning-points in home and export deliveries of engineering products, this would be a helpful additional forecasting tool.