The Effects of Economic Growth, Technology Change, Consumption Pattern Change and Foreign Trade on Domestic Demand for Primary Metals, 1963-82.
This report expands an earlier study by Jack Faucett Associates (OFR 40-88) of the same title. Both reports are based upon an interindustry analysis from 1963 through 1982, during which time U.S. metals consumption and production did not keep pace with economic growth. The report discusses three sources of change: economic growth, technological change, and composition of final demand, as well as the relative importance of the individual components of final demand for metals. The results show investment and personal consumption to be the most metal-intensive components of final demand, and technology change to be the major cause of decline in consumption growth during the study period. Technology change is defined as alterations in production processes resulting in more or less consumption of metal per unit of output, often because of material substitutions and design changes. A trade analysis shows the significance of import growth, particularly indirect imports (metal contained in imported goods) as a factor contributing to the reduced growth rate of domestic metal production. The effect of import growth is partially offset by indirect export growth, suggesting that continued increase of all U.S. exports can have a strong effect in reducing the negative trade balance in metals.