beyond pt 0 23/1

Cars and other transport equipment (ranked 20)
The dominant industry in this sector (about 65 per cent of value added) is
motor vehicles and parts. After having output growth at about that of
GDP over the historical period, it is forecast that the industry is likely to
grow slower than GDP over the forecast period.
This forecast is based on the following factors. First, the industry is
now exporting a significant fraction of its output (over ten per cent in
1997–98). However, it is expected that growth in export sales will drop
away over the forecast period, dampening output growth. Second, it is
expected that the industry will continue to lose share in the local market,
albeit at a slower rate than in recent history. This occurs despite rapid
productivity growth and the consequent slowing in the rate of
deterioration of the industry’s competitive advantage against imports.
Finally, lower growth in investment, which accounts for 35 per cent of
motor vehicle demand, is expected in the forecast period than occurred in
the earlier period (see Table C.1). Offsetting slightly these negative factors
is an assumption of continuation of technological and taste changes
favouring the use of motor vehicles (see Table D.1).
The remaining industries in this sector are ships, aircraft and railway
rolling stock. For the ship and aircraft industries, strong growth in output
is forecast. In the forecast period both industries are expected to continue
the trend towards becoming specialised in parts and repairs, thereby
producing products that will be complementary with imports. For railway
rolling stock a negative projection has been made.
With strong productivity growth in the sector, employment is expected to
fall at the rate of 2.4 per cent per year through the forecast period.
Non-metallic construction materials (ranked 21)
The non-metallic construction materials sector is ranked below the
construction sector because of technology assumptions. As shown in
Table C.3, it is assumed that inputs of the sector’s products per unit of
output in customer industries will decline by 0.3 per cent per year. The
sector’s main customers are in construction, which has a forecast growth
rate of 2.4 per cent. The output forecast for the non-metallic construction
materials sector is annual average growth of 1.7 per cent. Within the
sector, the industry with the highest forecast growth rate is non-metallic
construction materials nec. This industry has a comparatively high export
share and it is expected to benefit from strong export growth. The
industry with the lowest forecast growth rate is cement. It suffers from
having the largest adverse shift in customer-industry technologies.
Employment in the sector is forecast to grow at the rate of 0.4 per cent
per year. This reflects average productivity growth combined with
subdued output growth.
Textiles, clothing and footwear (ranked 22)
Textiles, clothing and footwear (TCF) ranks last in the output forecasts.
Nevertheless, it is expected to have a higher growth rate in the forecast
period than it had over the period 1993–94 to 1997–98. In the historical
period, the TCF sector experienced substantial structural change which
will ease in the forecast period. This is the main factor underlying the
forecast of improved prospects. Another positive factor is strong export
growth, albeit from a small base.
76