ECONOMIC

to maintain a somewhat larger work force than they would otherwiserequire, as assurance against the departure of experienced workers.4. Another factor that may have acted to restrain the rise in outputper man-hour was the behavior of average weekly hours. As notedbefore, weekly hours in the;private nonfarm sector remained virtuallylevel throughout the year. Increases in man-hours resulting from increasedhours rather than from increased employment will usually leadto a rise in output per man-hour, since a smaller proportion of total manhoursis lost to start-up and shut-down routines. In 1972, 35 percentof the increase in man-hours resulted from a longer workweek. In 1973,however, only 5 percent of the increase in man-hours in manufacturingwas attributable to longer working hours.TABLE 10.—Aspects of capacity utilization, selected years, 1948-7319481953195519591965196619671968196919701971197219732PeriodTotal92.795.590.081.489.091.987.987.786.578.375.078.683.0FRB manufacturingPrimaryprocessing98.194.393.782.791.192.185.786.888.581.579.384.689.8Capacity utilization(percent)Advancedprocessing89.896.187.780.787.891.889.188.185.476.572.775.479.4FRBmajormaterials87.987.389.881.590.791.286.889.590.786.685.890.294.9Whartonmanufacturing92.492.390.982.290.295.992.994.796.088.385.690.03 95.8Percentofmanufacturersneedingmorecapacity0)0)( l )0)475045434542313549Ratio ofunfilledordersto shipmentsindurablegoodsmanufacturing0)0)4.273.443.123.513.383.273.132.902.592.594 3.00Percent of companiesreportingSlower 60 days ordeliveryof commit-longer formaterialsmaterialsments for32 (03153666360666764737144655364656351554854635788 781 Not available.2 Preliminary.3 Average of first 3 quarters.* Based on seasonally adjusted data through November.Sources: Board of Governors of the Federal Reserve System (FRB), Department of Commerce, and Wharton School ofFinance.Our experience in 1973 raises the question whether we were at "potential"even though output was, on the average for the year, 2^4 percent belowthe commonly measured figure of "potential" output. Being at potential doesnot mean that output cannot be raised further. In 1973, although employmentwas still rising rapidly, output increased slowly and the rate of productivityincrease sagged and actually fell in the second and fourth quarters.A more rapid rise in output would probably have required an even morerapid increase of labor input, if it had been available, and would have depressedlabor productivity further.The conventional measurements of potential assume that the labor forceand productivity rise, and that weekly hours of work decline, along an esti-64