OF COSTS AND INFLATION , AND TO MAKE FOR A FAVOURABLE COMBINATION OF GROWTH , EMPLOYMENT AND MONETARY STABILITY .
IN INDUSTRY THERE IS THE NEED FOR CONTINUING ADAPTATION TO NEW PATTERNS OF DEMAND AND NEW MANUFACTURING TECHNOLOGIES . PROGRESS IN MANUFACTURING INDUSTRY HAS TO COME WITH EXPOSURE TO COMPETITION , AND PROFITABILITY TO ASSURE INVESTMENT , RESEARCH AND DEVELOPMENT . INTERVENTION IN FAVOUR OF SECTORS WITH DECLINING DEMAND MUST BE LIMITED TO HELPING ASSURE AN ORDERLY AND SOCIALLY ACCEPTABLE RESTRUCTURING AND REDUCTION OF CAPACITY .
WHILE THE TREND IN THE NUMBER OF PERSONS DIRECTLY EMPLOYED IN MANUFACTURING IS UNLIKELY IN MOST COUNTRIES ( THOUGH THERE SHOULD BE EXCEPTIONS ) TO ABSORB MUCH OF THE PRESENT UNEMPLOYMENT , A COMPETITIVE MANUFACTURING SECTOR IS BOTH FUNDAMENTAL TO THE COMMUNITY ' S PROSPERITY AND ECONOMIC STRENGTH , AND TO THE PROSPECTS MORE BROADLY FOR EMPLOYMENT GROWTH , FOR EXAMPLE THROUGH ITS IMPACT ON RELATED SERVICE SECTORS . MOREOVER CERTAIN GROWTH SECTORS SHOULD SEE A MARKED INCREASE IN EMPLOYMENT , NOTABLY IN ENERGY-RELATED INDUSTRIES .
IN THE TERTIARY SECTOR THERE IS MUCH GREATER SCOPE FOR EMPLOYMENT GROWTH , AS WITNESSED BY TRENDS EVERYWHERE ( INCLUDING THE UNITED STATES WHERE TRENDS HAVE GONE FURTHER THAN IN EUROPE ), AND BY THE CONTINUING GROWTH IN LATENT DEMAND AND SUPPLY . GROWTH IS PERSISTENTLY STRONG FOR HEALTH , EDUCATION , TRAVEL , LEISURE AND SOCIAL SERVICES , ALTHOUGH THERE IS ALSO INCREASING CONCERN OVER THE QUALITY OF PUBLIC SERVICES .
GREATER INDIGENOUS ENERGY PRODUCTION AND CONSERVATION IS NOW A VITAL MACROECONOMIC OBJECTIVE , WITHOUT WHICH THE PROSPECTS FOR NON-INFLATIONARY GROWTH ARE POOR INDEED . FOR THE SHORT-RUN AND MEDIUM-TERM OIL CEILINGS HAVE BEEN SET BY THE COMMUNITY ( 500 MILLION TONNES FOR CONSUMPTION IN 1979 , AND 472 MILLION TONNES OF IMPORTS IN 1985 ). THE EVIDENCE SUGGESTS THAT THESE OBJECTIVES CAN BE ACHIEVED BY BREAKING THE PAST ASSOCIATION BETWEEN THE GROWTH OF DOMESTIC PRODUCT AND OIL USE , ALTHOUGH THE FEASIBLE EXTENT OF THIS CHANGE IN TREND IS STILL THE SUBJECT OF CONSIDERABLE UNCERTAINTY .
TO ACHIEVE A MODERATE GROWTH RATE IN COMMUNITY GDP IN 1980 , AND TO RESPOND ALSO TO THESE ISSUES OF STRUCTURAL DEVELOPMENT , THERE IS A VITAL ROLE TO BE PLAYED BY HOUSEHOLD SAVINGS AND PRIVATE INVESTMENT INCLUDING STOCKBUILDING . WHILE THESE VARIABLES ARE DIFFICULT TO PREDICT AT ALL EXACTLY , THEY SHOULD BE EXPECTED TO BEHAVE ACCORDING TO A NUMBER OF BASIC PRINCIPLES .
IN 1980 SOME DECLINE IN THE HOUSEHOLD SAVINGS RATIO WOULD BE DESIRABLE , SO AS TO HELP SUSTAIN REAL DEMAND WITHOUT INCREASING COSTS AND THENCE PRICES . FOR THIS TO BE POSSIBLE , INFLATION EXPECTATIONS NEED VERY SOON TO BE CALMED DOWN , AND THIS REQUIRES CONFIDENCE IN THE OBJECTIVES OF ECONOMIC POLICY .
INVESTMENT , INCLUDING STOCKBUILDING , IS TYPICALLY THE MOST VOLATILE COMPONENT OF THE BUSINESS CYCLE : IN 1975 INVESTMENT FELL 5 % IN VOLUME TERMS IN THE COMMUNITY AS A WHOLE , WHILE THE RUNNING DOWN OF STOCKS ALONE CONTRIBUTED 2