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elatively weak investment growth through the forecast period. This
generates in the forecast quite weak productivity growth (1.2 per cent
per year) and hence relatively strong employment growth (1.6 per cent
per year).
Dwelling ownership (ranked 13)
The output of the dwelling ownership sector is the services of the
economy’s dwelling capital stock, which consists of rent and imputed rent
(i.e. the rental value of the housing stock, even if it is being occupied by
the dwelling-owner and therefore not rented). The expenditure elasticity
of demand for these services is above one. However, the growth prospects
of the sector are well below the growth prospects for private consumption
(see Table C.1). This is due to a negative substitution effect arising from
an increase in the price of dwellings relative to the CPI. Little
technological improvement in construction methods for houses is
forecast. With more rapid technological improvements in the rest of the
economy, housing services become comparatively expensive.
Paper, paper products, printing (ranked 14)
Output growth in this sector mainly reflects output growth in the two
largest components, newspapers and books and commercial printing. The
newspaper and book industry suffers in the forecasts from an
unfavourable taste change by consumers, leaving its output growth at
around 1.0 per cent per annum. The forecast for output growth in
commercial printing is considerably higher due more intensive use of
printing services by industries.
Other industries in this sector included pulp and paperboard, and bags
and containers. For pulp and paperboard, relatively weak growth in
customer industries is expected, offset by strong growth in pulp and
paperboard exports. Weak growth for the bags and containers industry is
forecast. This industry suffers from technological changes economising in
the use of its products.
The forecast for labour productivity in paper, paper products and printing
sector is average annual growth of 3.5 per cent, giving employment
growth of 0.9 per cent. The model projects strong growth in the sector’s
capital stock, which explains the forecast of strong productivity growth.
Leather, rubber and plastic products (ranked 15)
The main positive force underlying the growth prospects of Leather,
rubber and plastic products (ranked 10) is strong export growth. This is
particularly influential for leather products. On the negative side, the
sector is forecast to experience strong increases in import pressure, which
restrains the prospects for rubber and plastic goods.
This sector is expected to have relatively slow productivity growth due to
weak growth in capital. Thus employment in the sector is forecast to rise
relatively strongly at an average annual rate of 1.6 per cent.
Construction (ranked 16)
The starting point for the forecasts was a high output year for both
dwelling and non-dwelling construction. Thus, as can be seen in the
Appendix table D.2 and from the general investment forecast in Table
C.1, quite weak growth for both forms of construction over the forecast
period has been forecasted.
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