Chapter II. The World Economy

Fuller data confirm the impression which we formed in May that OECD countries' total output did not change much in the first quarter. It probably increased by about ¼ per cent, with even this small rise attributable wholly to stock movements in the US. Final demand in the US fell and there were declines in total output in a number of countries, including Japan, Germany, Australia, the Netherlands, Switzerland and possibly Italy (for which there are conflicting estimates), white France achieved only marginal growth. The fall was notably severe in Germany, where construction suffered badly in the cold winter. This probably had a wider impact also, and, in North America at least, the initial effect of the slump in oil prices seems to have been depressive, with drilling activity sharply reduced, especially in the US. There may also have been a tendency for expenditure, perhaps on investment in particular, to be deferred in the expectation of falling prices and interest rates.