Business Growth Forecast

Press, Volume CIII, Issue 30635, 29 December 1964, Page 9

Business Growth Forecast

(XZP. A.-Reuter—Copyright) NEW YORK, Dec. 28.

American business will enjoy a better year in 1965 than in 1964. but the economy will have to surmount many more obstacles, a group of 13 economists predicted m a report made public yesterday.

The economists’ opinion, put forward in the National Industrial Conference Board’s annual economic forum, predicted that the nation’s gross national product would reach 666.000 million dollars by the end of 1965—a 5 per cent rise.

The forum, established nearly 20 years ago, forecast industrial production would rise 3.7 per cent. Consumer prices would advance by about 1 to li per cent by the end of the year, its average in recent years, they said. Unemployment was expected to get slightly worse, possibly rising to 5.4 per cent by the end of the year. The forum believed growth prospects were good in 1965 because of the strong demand for retail and capital goods, and the continuing strength of the most sensitive business indicators, among other factors.

But negative factors in their view included rising labour costs, the “debt explosion,” with private debts jumping about 75,000 million dollars last year, and the balance of payments problem.

Consumer spending was expected to increase by about 18.000 million dollars or 4.6 per cent, and increased employment and continuing pay increases would contribute an estimated 41 per cent gain in personal income. The largest production increases, of about 9 per cent, in the non-durable goods sec-

tor, was expected to be in rubber and plastics products, followed by the chemical industries—about 7 per cent. A decline in the demand for cars was forecast, based on the feeling that recent high sales “seem improbable for another year.”