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•
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1964

■ -m m
: •

THE NEW ENGLAND
ECONOMY IN 1970

i

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j

B
iirlingtai

Existing

M a jo r

Highways

Four-lane divided or lim ite d access
Expressways

Com pleted

by

1970

NEW E N G L A N D ’S E X P R E S S W A Y N E T W O R K
ACTUAL

AND

PR O JE C TE D

T h e divided, lim ited-access highways shown o n this map, which docs not include all primary roads, are expected to cairy
about 45 percent o f N ew England s 1070 traffic. T h ey will account for about 25 billion vehicle m iles of th e regional total
of 55 b illion estim ated for 1970 by th e Census Bureau,







1959

Federal Reserve Bank of Boston




THE
NEW ENGLAND ECONOMY
IN 1970

TH E NEW E N G LA N D EC O N O M Y IN 1 9 7 0
Pa

rt

I— C

h a llen g es

. . . .
.
Manufacturing and New England . . . .
Capital I n v e s tm e n t....................................... .
Challenges to G r o w t h ....................... .... . .
Structural Problems of Growth

II — E s t i m

Labor Force Projections.................................
New England’s Employment Prospects
The Outlook for Manufacturing

. . . .

T o u r is m ............................................................

. . . .

Metropolitan Growth

8

Boston — The H u b ............................................
Economic Growth and the Use of Land

10

. .

14
16
17

11

Resources to Support G ro w th ............................

17

Financing Economic G ro w th .......................

19

ates

.
.

a n d

Ev

a l u a t io n s

25

State and Local Government — Expenditure
and Revenue.......................................................

44

.

26

E d u c a t i o n ............................................................

47

.

36

Mcdical Care and Public Welfare

49

23

.

I n c o m e ............................................................

.

38

.
Personal Consumption Expenditures
. . .
Savings and Financial Institutions , . . .

39




. . . .

8

A g ricu ltu re .......................................................
H o u s in g ............................................................

o p p o r t u n it ie s

15

Growth Through R esearch............................

p a r t

a n d

36

40
42

. . . .

Transportation.......................................................

50

I t is a pleasure to send you the 1959 Annual Report of the Federal Reserve
Bank of Boston.
You will observe that as in previous issues much of the report is devoted to a discussion
of the New England economy rather than the operations of our Bank.
This year we present the results of an extended study of some of the possibilities and
probabilities of the New England economy in 1970. The general areas we have studied are
indicated in the table of contents on the opposite page.
Although the need for a look ahead for New England seems hardly to require justifica­
tion, perhaps the homely words of C. F. Kettering arc appropriate here: "W e should all be
concerned about the future because we shall have to spend the rest of our lives there/’ Our
purpose in this presentation is to help, as best we can, all those in private enterprise and
public affairs who will have to make major decisions which are directly related to the broader
aspects of New England’s economic future.
In reading the following pages it is important to remember that economic projections
are not predictions: at best they can be merely estimates of what seems likely to occur on
the basis of specific carefully chosen assumptions. The wisdom of our assumptions and the
degree of skill with which we have built upon them can be proved only by time itself.
Summaries of the Bank’s operations conclude the report. For the increasing efficiency
of these operations, and for the assistance of our officers and staff in helping still further to
expand the Bank’s usefulness to New England’s people, I extend my own thanks and those
of our directors.
Our gratitude goes also to the region’s bankers and other business leaders for their con­
tinuing generous co-operation.

February 1,1960







FOREWORD
In what ways and how fast is our national economy expanding? Is the growth of a
kind which is likely to m eet the needs of the American people as a whole and is the
expansion fast enough? If changes in the direction of growth arc needed, how can these
best be made within the dem ocratic and private enterprise systems? If expansion needs
to be accelerated, what force or forccs should be employed, and how?
These are some of the difficult questions which arc of increasing conccrn to the
nation. They make for continuing controversy about the comparative strength and
growth rates of the free and com munist nations and the implications of these respective
rates of growth in terms of international relationships. T h e questions and the debates
explicitly recognize the need for defining national goals and devising means of achieving
them which will enlist widespread support.
T o a lesser degree the nation's political subdivisions — regions, states and m unici­
palities — face much the same problems. W h a t is our econom ic destination? W h a t
roadblocks are wc likely to encounter? How shall we get over or around them?
T h e following pages attem pt to answer some of these questions as they apply to
New England. T h e answers are necessarily tentative and at times incom plete. They
are based on analyses of the region’s recent econom ic history and on projections of
trends in im portant sectors of New England's econom ic life as these have been measured,
qualified and balanced one against another.
T h e New England economy is an integral part of the national economy. In taking
this look at New England in 1970, it has been ncccssary, therefore, to make certain
assumptions regarding the course of the nation over the next decade. F o r example,
a major war or country-wide depression w'ould automatically disrupt conventional eco­
nom ic relationships and overturn customary expectations. T h is report projects New
England econom ic developments in the absence of such social catastrophes. At the
same tim e, it assumes conditions which will necessitate a continuation of federal expenditures at a level comparable to that of 1959. It also assumes that the nation’s
econom ic life is likely to follow prevailing patterns of population growth, technological
change and political stability, and that Newr England’s econom ic life will generally
conform to these patterns subject to discernible and measurable regional differences.
T his study acknowledges one major goal for the New England economy during the
1960’s — jobs for all who wish to work at wages and salaries which compare favorably
with those paid elsewhere. If regional birth and death rates continue as expected, New
England’s population will increase slightly more than one m illion — the greatest gain
in any decade of the region’s history. T o support such a population rise without sub­
stantial net migration, New England will need to provide an additional 421,000 jobs at
acceptable incom e levels.




( 5)




O ne difficulty in any attem p t to project econom ic values is that price changes may
alter the basic unit of measure in which change is recorded. In this report this funda­
m ental difficulty is by-passed — not resolved — by expressing all estimated values in
terms of 1957 dollars unless otherwise noted. T h e 1957 dollar base was chosen because
this was the latest year for which m uch of the neccssary data were available. By using
constant dollar values, growth is expressed in real rather than in merely monetary terms.
Insofar as inflation has affected the growth of recent decades, projection techniques that
rely on reccnt trends must necessarily assume, for purposes of analysis, that the 1960’s
will experience the same degree of impact.
T h e sectors of New England’s 1970 economy considered in this report have their
own prospects and problems. B u t com m on to all of them , and often of primary im port­
ance, are certain developments unique to the region. Part I of this report deals with
the composite pattern that seems to characterize New England's econom ic outlook.
Such a discussion must, of course, consider the absolute size, the character, and relative
growth rate of econom ic activity in New England, but it must also examine special
problems likely to hamper the region’s expansion and appraise possible stimulants to
growth. Part II consists of a series of New England econom ic projections in such fields
as population, labor force characteristics, income, markets, power and transportation
facilities, and local and state government revenues and expenditures. It must be em pha­
sized that projections are not predictions; they are simply estimates of the future based
on numerous well-founded assumptions.
T h e objective of this study is not to provide pinpoint accuracy in statistical detail
but to paint a broad picture of econom ic relationships which may facilitate the decisions
which will shape the New England economy in the dccadc ahead.
T h e challenges which will confront the New England economy during the next
decade call for positive action. T h e business com m unity must display energetic enter­
prise; public officials m ust have the vision to develop constructive programs that will
encourage econom ic growth. T h e alliance of these two forces, as history has shown,
will enable New Englanders to build a still more vigorous and prosperous economy.

(6)

New England is entering what can be its greatest decade. During the 1960’s the
region’s population is expected to rise by more than a m illion persons and its real annual
income by $7.1 billion, a 21 percent increase per person over 1957. Such unprecedented
growth m ates it necessary, as never before, to define and appraise attendant problems
and lay out courses of action which will bring about the fullest realization of potential
opportunities.
Reporters have all too frequently confused a decline in New England’s relative
share of the national economy with an absolute decline in regional activity. Since the
Northeast — the older, more highly developed section of our country — may continue
to expect a slower rate of growth than less highly developed regions, this confusion is
likely to persist. New Englanders themselves are not so much concerned about their
growth rate as they arc about providing well-paying jobs for a constantly growing number
of workers. In itself, a rise in population can sometimes create a drain on available
resources which is not offset by the contribution of additional manpower.
It is important, therefore, to view New England’s prospective growth with this in
mind: New England is expected to add 17 persons per square m ile during the next 10
years as against only I I for the nation. By 1970 New England population per square
m ile is expected to be 180 as against 72 for the country as a whole. W h ile New England
cannot anticipate the discovery and exploitation of such vital mineral resources as coal,
oil, or iron, so im portant to the development of some regions, neither does it contain, as
others do, vast barren and unproductive areas. T h e econom ic value of land varies so
much among regions that dircct comparison of more detailed econom ic im plications is
extremely difficult.
T h e region’s econom y docs not automatically operate to guarantee the projections
made in these pages. For example, a population rise of one m illion presupposes an
expanding supply of jobs at com petitive wage levels. Unless suitable jobs are available
at such levels, net out-migration is likely to check population growth. Basically, the
com petence, energy and imagination, and the decisions of millions of persons — producers, consumers, entrepreneurs and workers who arc actively involved in the regional




(7)

economy — will determine the results. T h e record supports the excellence of the avail­
able talent. Despite the contraction of the textile industry, and in the face of vigorous
com petition from other regions, econom ic activity in New England created $206
billion in real income during the 1950’s — an increase of 26 percent over that of the
1940’s and almost twice that of the 1930's. B ut the recipe for the region’s growth
and the methods of achieving it have changed substantially in recent years and will
change still more in the years ahead.
It is not enough to realize the 1970 incom e and production goals; it is also essential
so to improve the economy during the 1960’s that the stage is set for a future of even
more remarkable growth, W e have com e to expect, even to require, ever-rising incomes
for an increasing population.

*
Structural
Problems
of Growth

%

T h e structural problems of growth clearly outweigh in difficulty those associated
only with its magnitude. M ost of the next 10 years’ population growth is expected to
occur in metropolitan areas, particularly in the suburbs. Som e analysts estimate that on
a nation-wide basis at least 80 percent of the net growth will occur in m etropolitan areas.
In New England, almost one-third of the entire population growth will take place in the
137 m unicipalities of metropolitan Boston which surround the 12 core cities and towns
of Boston, Brookline, W atertow n, Cambridge, Arlington, Somerville, M edford, Malden,
Everett, Chelsea, Revere and W inthrop. Such growth will put a strain on the lim ited
available resources by generating heavy demands for new schools, roads and other
transportation facilities, water and sewer systems in cities and towns whose budgets are
already hard pressed. T h e need for construction workers to build these projects will,
of course, com pete with the region's manufacturing labor needs.
Structural changes within the labor force will probably intensify the problems of
factory management. T h e number of workers in New England is expected to expand
by 4 21,000 during the next decade, with much of this expansion resulting from older
w omen’s taking jobs outside the hom e. In contrast, the proportion of males over
14 years of age in the labor force is expected to decline from its current level of 76
percent to 74 percent even though the number of male workers is expectcd to increase
by 207,000. Employers will have to tailor their job requirements to these expectations.
❖

M anufacturing
and New England




Manufacturers must play the central role in the development of New England’s
econom ic potential. Em ploym ent needs and opportunities in construction, transpor­
tation, com m unication, education, government and other services are the result of
over-all econom ic growth. In highly industrialized New England this over-all growth
is supported largely by manufacturing payrolls and profits.
M anufacturing activity will thus be the major determ inant in the growth of New
England’s population, incom e and output. T h e incom e earned by the sale of manu­
factured products to other areas provides the wherewithal for much of N ew England's

consumption. T h e success of the region’s manufacturers rests on their ability to com ­
pete in national and world markets.
In 1954 New England’s value added by manufacturing was approximately $1.5
billion (1 6 .8 percent) less than it would have been if the region’s growth during the
preceding seven years had matched that of the nation. T h e reasons for this disparity
lie in the nature of New England’s manufactured products and in the techniques of
their production.
O n b oth scores, New England has reason to examine its situation carefully. T h e
record shows that in general the New England states have depended heavily on indus­
tries th at have declined nationally, such as textiles, or on industries with slow rates of
growth such as shoe manufacturing. Q uite naturally, the manufacturing growth rates
of the six states have reflected this concentration even to the extent of obscuring the
effects of comparatively strong growth in other industries. W h e n state manufacturing
growth rates are adjusted to take into account differences in product concentration,
New England’s growth rate compares much more favorably with that of the nation.
T h ese findings suggest two approaches by which New England can hope to
expand its industrial production:
First, the region should concentrate wherever possible on those product lines which

TABLE

1

THE ECONOMIES OF
THE UNITED STATES AND NEW ENGLAND-1960 AND 1970
U N IT E D

S T A T E S ________

NEW

ENG LAND

1960

1970

Percent
Increase
1960-1970

180,100,000

213,800,000

18.7%

Civilian Labor Force

73,600,000

83,600,000

13.6

4,175,000

4,614,000

10.5

School Enrollment
(Public and Private)

42,000,000

50,200,000

19.5

2,390,000

2,680,000

12.1

Personal Incomc
(Billions of 1957 dollars)1

$385.0

5612.4

59.1

$25.0

$32.0

28.0

State and Local Government
Expenditures
(Billions of 1957 dollars)

$ 42.7

$ 57.5

34.7

$ 3.5

$ 4.3

22.8

Population

1960

1970

Percent
Increase
1960-1970

10,322,000

11,380,000

10.2%

1 T h e U . S. in co m e projections were m ade on a different basis than th e N ew E n glan d projections and arc not,
therefore, strictly com parable.




rely heavily on skilled labor backed up by special research com petence. Som e of these,
such as electronics, seem likely in the future to achieve the m ost rapid growth. As in
the past decade, New England’s best opportunities for growth may be found in
research-based products;
Second, the region’s manufacturers must employ every feasible means to increase
the productivity of the labor force.
About 1.0 percent of the nation’s population is now engaged in manufacturing as
against only eight percent in the 1920’s. In New England the figure is now 15 percent,
about the same as in 1920. T h e stability of this New England ratio is due partly to the
shift of some workers from low to higher productivity industries and partly becausc of
the increased demand for workers in government, trade and other service occupations.
Over the past 10 years the value of New England manufactured products has increased
at an average annual rate of 3.4 percent, enough to support a continuously rising
incom e level.
^

Capital
Investm ent




^

^

T h e trend of manufacturing and changes in productivity during the next 10 years
will depend more and more on decisions regarding capital investment. Industry by
industry, New England manufacturers typically use less capital per worker and have
been investing less per worker in capital facilities than their national counterparts.
T o some extent this reflects differences in resources and industrial structure. W ith
New England lacking in basic mineral resources, heavy capital-intensive industries have
not developed in the region. B u t even in those New England industries which produce
the same kinds of goods as are made elsewhere in the nation, there is a slower rate of
capital investment. If the labor force is growing more slowly in New England than in
the nation, then perhaps a smaller am ount of new equipm ent per worker is needed to
increase productivity. B ut investm ent needs are greater when growing industries must
replace a contracting industry. In general, it must be concluded that New England’s
40 percent slower investment rate for the years 1954-56 arose largely from the differences
in management decisions about the value of new investment. T h e relatively lower out­
put per man-hour in New England factories is in part a cause and in part a result of
the region's slower investment rate.
A good part of the rise in output produced by increased investm ent comes not
because more capital equipm ent is at work but because the new equipm ent is of
improved design which encourages, and may even require, adoption of more efficient
production techniques. An age of rapid technological change puts a premium on rapid
renewal and development of equipm ent. Even though there may be little possibility for
significant progress, New England will lose business if it does not advance productive
efficiency enough to hold its present position in product and price com petition in
national and world markets.
If the region’s manufacturers were to expand their rate of investm ent in plant and
equipm ent by $36 m illion (in 1955 dollars) each year, productivity m ight increase at

( 10)

about two percent a year. In that case, the value of the region’s manufactured products
might rise about 34 percent by 1970. Such a rise will indeed be necessary to achieve
the higher wage levels that factory and other workers will regard as their share of the
growing regional incom e. If the manufacturing output goal is to be realized, such
projected increases in investment and productivity will have to be accompanied by
an increase in the num ber of factory workers, with manufacturing em ploym ent rising
by about 274,000 from 1957 levels. If manufacturing competes more vigorously in the
labor market it can increase its share of New England's total work force from 34 percent
in 1960 to 37 percent in 1970. There is precedent for such an increase. During the
1920’s, New England manufacturing significantly enlarged its relative share of the
regional labor force.

%

%

T h e challenges facing New England manufacturers arc not to be dismissed lightly.
T h e region's increasing remoteness from the national market presents an im portant
obstacle to growth. Location at the end of the line means high costs for bringing in
raw materials and fuels and for delivering finished goods.
M any com m unities in New England are concerned about their increasingly heavy
dependence on the region's newest and most vigorous industry, electronics, especially
since the industry’s strength derives in large measure from the nation’s defense outlays.
During fiscal 1959 C onnecticut received more prime contract defense awards, on
a per capita basis, than any other state. C onnecticu t and M assachusetts together, with
non-secret defense contracts totaling $2 billion, accounted for 10 percent of the national
total that year. W ith the changing structure of procurement, C onn ecticu t received
25 percent fewer contract award dollars in 1959 than in 1956, and M assachusetts, on
the other hand, 126 percent more. Obviously, a marked reduction in defense outlays,
or a shift in the nature of materiel needed, as from manned aircraft to missiles in recent
years, could have a concentrated and perhaps devastating effect on defense industries
and com m unities dependent on them. History has demonstrated the com m unity distress
which can arise from excessive dependence on a single industry or firm. T h e stability
gained through industrial diversification should be a major consideration in future com ­
munity development programs.
T here are prospects of new — or at least increasingly serious — problems arising
during the 1960’s from the region’s tendency to concentrate its m anufacturing effort
on products in which labor costs make up a large portion of total costs. In every m ajor
New England industry, with the exception of apparel and electrical machinerymanufacturing, wages account for a larger part of value added by manufacturing than
they do in the national average.
Since labor is New England’s m ost substantial “natural asset,” it would seem
logical to develop still further those industries with a labor-intensive output. Y e t this
course may expose manufacturers to a com bination of pressures th at could becom e




(in

Challenges
To Growth

NE W ENGL AN D MA NUFACTURING EMP LOYMENT
P R O JE C T E D 1970 E M P L O Y M E N T
(t h o u s a n d s )
0

100

P E R C E N T C H A N G E S IN
E M P L O Y M E N T , 1957 T O 1970
200

0%

f 50%

+100%

E LECTRICAL MACHINERY
MACHINERY NON ELECTRIC
TRANSPORTATION EQUIP.
MISC. MANUFACTURERS
FABRICATED METALS
I EA1HER AND SHOES
AFPAREL
TEXTILES
PAPER
PRINTING AND PUBLISHING
FOOD
INSTRUMENTS
LUMBER AND FURNITURE
RUBBER
PRIMARY METALS
C H EMICALS
S T O N E -C LA Y AND GLASS

severe during the 1960’s. O n the one hand there will be increasing com petition from
foreign manufacturers with similar specializations but lower labor costs, and on the
other the likelihood of rising wage scales. Because wage increases will have their greatest
im pact on employers in labor-intensive 'industries, New England manufacturers will
be particularly concerned.
T h e increasing com petition in dom estic markets of foreign manufactured goods
with those made in New England has already adversely affected the textile industry.
T h e region’s shoe industry is keeping a wary eye on rising im port levels and machinery
manufacturers have felt the force of the com petition in the loss of some domestic as
well as some foreign markets. New England producers have a right to expect that the
burden of adjustm ent to federal foreign policies will not be regionally concentrated.
M ore investment, greater autom ation, higher productivity — these are the paths
to com petitive strength for New England’s manufacturers. T h e task is a formidable
one. A 1959 survey conducted by the Boston Reserve Bank indicates that perhaps 16
percent of the presently occupied manufacturing space in New England was constructed
before 1900, and that more than 50 percent of the equipm ent being used by 10 of New
England’s 19 m ajor industries is more than eight years old. T o replace outmoded space,
to keep pace with current depreciation and to provide for the projected employment
growth will require about 247 m illion square feet of new m anufacturing space in the
1960’s. T his amounts to construction of about 25 m illion square feet of new manufac­
turing space annually. T h e annual rate of new plant construction for the years 1950-57
was only 14 m illion square feet.




( 12)

I t is possible to m eet these challenges, but obviously n ot w ithout substantially
increasing investm ent in new manufacturing facilities. By 1970 the annual investment
must be $990 m illion (in 1955 dollars) as compared with the 1955-1958 average level
of $450 million.
Still there are factors in New England’s prospect which may gradually relieve some
of the pressures of both domestic and foreign com petition. O ne is the current emphasis
on lighter-weight products of plastics and aluminum . Technological and stylistic trends
which reduce weight help to cut New England’s two-way transport costs.
Im provem ents in com m unication and transportation also, particularly in air
express, are encouraging new systems of inventory and distribution methods which
permit national, even world-wide, customer-servicing of high-value products from New
England locations.

B o th of these developments are pertinent to New England’s welfare, since its
recent econom ic history shows a consistent shift to new products and new processes
based on research. Studies show that between 1950 and 1955, 85 percent of the total
em ploym ent gains in expanding New England industries was traceable to six industries
which had allocated the largest amounts to research and development. In 1955, about
one-third of the region’s manufacturing employment was dependent on new products
introduced during the preceding 10 years. As research outlays m ount, and more firms
establish their laboratories in the region, the contributions of research to new employ­
m ent will gain wider recognition.
Experience itself will also be of value in further expanding m anufacturing activity
in New England. Just as manufacturers have of necessity developed an ability to adapt
both operations and output to changing conditions, so have both public and private
groups at local, state, and regional levels attained proficiency in stimulating industrial
growth. Operating to help close the gap betw een current and needed investment out­
lays in m anufacturing is a com bination of especially-designed organizations. O ne type
of financing agency, which was originated in New England, is the state-wide development
credit corporation that makes risk-type capital loans to assist manufacturing growth.
In addition, about 100 New England com m unities have established varying types of
industrial development corporations expressly to provide sites, build plants, and make
capital loans to manufacturers. R ecently some of these com munity-development groups
have built new plants even before locating a prospective tenant. State-supported in­
dustrial building authorities, through which the state guarantees payments on mortgages
used to finance the construction of new industrial plants, have been created in M aine
and R hod e Island to stimulate new plant construction. Private developers have
brightened the industrial outlook by carefully tailoring sites for modern plants in
uncongested areas and in some cases providing a com plete "package” — design, financ­
ing and construction. In com bination, these especially directed efforts reinforce the
prospects for the region’s continuing manufacturing growth.




( 13)

Growth
Through
Research

Metropolitan
Growth

T h e boundaries of mushrooming m etropolitan areas are already beginning to
overlap. T his fact, together with the changing uses for land, has intensified the pres­
sures for redevelopment. In urban areas many buildings must be razed and residential
slums cleared for new uses. In suburban sections, as industries seek sites for new plants
and developers seek locations for housing projects, towns will stiffen their zoning codes
to encouragc more rational development.
T h e 1960's will undoubtedly be characterized by massive rebuilding of New Eng­
land urban areas; the need is both great and acknowledged and the techniques of rede­
velopm ent are being refined to m eet individual situations.
T h e need for extensive industrial and residential renewal in New England is evident
to even the casual observer. M u ch of New England’s manufacturing is housed in factories
constructed to m eet the needs of an earlier era. T his housing reveals, moreover, that
the structural alterations made to adjust to technological changes and shifts in manu­
facturing activities have frequently been of a “make-do” nature. F o r example, it is
estim ated that 50 percent of the shoe and leather industry’s present m anufacturing floor
space was built before 1919.
Age is not necessarily an indication of structural or functional obsolescence. Many
old residences which have been kept in repair and modernized provide attractive and
adequate housing. B ut a high proportion of old buildings is a danger signal. T h e
latest housing census, made in 1950, revealed that 62 percent of the region’s housing
was built before 1919 as compared with the nation-wide ratio of 45 percent. Only
11.8 percent of the New England population lived in houses built since 1939, as com ­
pared with 20 percent for the nation. A high level of construction activity since that
tim e has perhaps changed these ratios, but the need for new building still remains acute.
A comprehensive urban renewal and housing program aimed at elim inating sub­
standard housing units, allowing families to “undouble,” replacing houses as they
becom e obsolete, and providing for the new families expected by 1970, would call for
the construction of at least 75,000 new housing units annually, whereas we have been
building at the rate of only about 50,000 units annually.
Intensification of renewal needs has brought new solutions to some of the prob­
lems. T h e practice of com munity planning and zoning, almost unknown 30 years ago,
is now general, and cities and towns are constantly seeking to make the m ost effective
use of building codes. Renewal activity not only involves the condem nation of buildings
and the acquisition of land for clearance and preparation for re-use, but, just as
essentially, demands an over-all m etropolitan area financial and directional approach
to the entire problem.
T h e Housing Acts of 1949 and 1954, in recognition and support of renewal pro­
grams, provided for federal absorption of two-thirds of the unrecovered costs of such
activities, and are particularly relevant to the urgent building problems of such longurbanized areas as New England.
Urban renewal activity in New England has accelerated as a result of this legislation.
By the middle of 1959, 48 m unicipalities had about $300 million com m itted in 84




( 14)

projects in various stages of development. As expectcd, the three southern New E ng­
land states have utilized the urban renewal provision more extensively than have
the northern states. C onnecticu t, with 23 percent of the region’s population, has
launched programs accounting for 51 percent of renewal authorizations in New England;
M assachusetts, with 50 percent of the population, has accounted for only 33 percent.
As of M arch 1959, New England as a whole had received 9.27 perccnt of all United
States urban renewal authorizations.

NEW E N G L A N D ’S CH ANG ING EMPLOYMENT PATTERNS
1970

D E C R E A S IN G
SHARES

70

T R A N S P O R T A T IO N
P U B L IC U T IL IT IE S
c n

S E R V IC E S
EX CE PT

60

b 0 ------ d 6ME5Tic

50

40

MO

GOVERNMENT

CHANg E

50

C O N S T R U C T IO N
F IN A N C E . IN S U R A N C E .
ETC.




INCREASING
S HA R E S

I9 6 0

1970

( 15)

T h e advantages of this program can and should extend far beyond the refurbishing
of residential, com m ercial and industrial housing. Its successful operation should
strengthen the entire econom ic base which supports municipal and state governmental
services, especially in the region’s econom ic focal point, metropolitan Boston.

•fc

Boston —
The Hub




^

%

T h e main challenges of econom ic growth will be faced in the Boston metropolitan
area, which will be required to house about a third of the region’s new inhabitants. By
1970 more than 3,738,000 persons will be living in the 149 towns and cities of the greater
Boston area. T h e com m unities surrounding the 12 central m unicipalities of greater
Boston will require housing for more than 300,000 additional residents — about as
many persons as now live in V erm ont.
T h e functional evolution of downtown Boston, the econom ic nerve center of
New England, will continue despite a decline in its relative im portance as suburban
areas expand. W ith the recognition of these changes and of the fundam ental interdependence of the com munities, must com e more effective organization for solving
metropolitan area problems.
Downtown B oston’s role in the econom ic life of the m etropolitan area is changing:
from 1947 to 1957 its employment in manufacturing and distribution contracted by
20 percent, whereas employment in finance, the service industries, and com m unication
and other utilities expanded by 11 percent, with a net loss of 14,000 jobs, or seven per­
cent. In the m etropolitan area surrounding the city of Boston, em ploym ent expanded
by 25 percent, with the gain distributed among all industrial and service categories.
Population and employment changes underscore Boston’s problems and oppor­
tunities for the com ing decade. As the city’s econom ic functions change, many build­
ings of all types will have to be razed and replaced. Y et mounting public expenditures
and a declining taxable base have already pushed property taxes to levels that have
greatly impeded new construction. In recognition of this problem and by means of
special tax arrangements, extensive redevelopment is already under way or in immediate
prospect in a number of areas in the city.
In Back Bay, some 31 acres will be occupied by the new $100 m illion Prudential
C enter; a 48-acre slum adjoining the Charles River in the W e st End has been cleared
for a $55 m illion modern-design residential district; in the Beacon Hill-Scollay SquareAdarns Square area will be a huge new government center — federal, state and city;
another slum of 15 acres has been cleared away near South Station and is zoned for light
manufacturing and commercial uses; work has already begun on a second vehicular
tunnel under B oston ’s inner harbor; and the final section of the Central Artery con­
necting expressways running north and south from the city has been com pleted. As
this report is written, plans for a 14-acre $15 m illion industrial research center adjacent to
the campus of Massachusetts Institute of Technology in Cam bridge have been
announced as a result of a unique collaboration among city authorities, M .I.T . and

( 16 )

an internationally-known Boston-headquartered developer of industrial parks.
In rapidly growing suburban communities property tax bills have also m ounted
because of the costs of expanding school and highway systems and water, sewer, police,
and fire departments. Bccause of increases in local government costs, com munities are
seeking increases in taxable properties and the kind and value of new construction
is becom ing of great importance.
A major transportation problem hangs critically over both the metropolitan area
and its outlying districts. T h e location and construction of highways and transit
facilities have long been recognized as a vital factor in an area’s econom ic destiny, yet
Boston is the only one of the nation's largest m etropolitan areas without an adequate
organization for over-all planning and im plem entation of a rational transportation
system. T h e attainm ent of New England’s 1970 econom ic potential depends in large
measure on the early development and activation of area plans so essential to the growth
of its central metropolis.

Lim ited land resources not only restrict residential and industrial building activity
but also increase the problems of providing new highways and parking facilities. Insist­
ence on the autom obile as the general means of personal transportation creates the
demand for highway and parking facilities. In one com m unity after another, such
facilities have proved inadequate to meet rush-hour requirements shortly after com ­
pletion. T h e problem is compounded by the lack of attractive and convenient rapid
public transportation to suburbs. Com pletely satisfactory solutions to these problems
have not been found for any m ajor city in the U nited States, and even the procedures
already devised need more effective im plem entation. Here, too, a unified approach to
all aspects of the transportation problem is of prime importance, particularly the inte­
gration of highway planning with mass transit facilities in the light of prospective
travel patterns.

Economic
Growth
and the
Use of Land

Com pletion of the $2 billion interstate highway system in New England during
the 1960’s will open up new recreational and residential areas and stimulate industrial
and commercial development, particularly at interchanges outside large m etropolitan
areas. E conom ic activity along B oston’s circum ferential highway R oute 128 is an
indication of what may be anticipated in degree along other new highways — in the
few years that R oute 128 has been open, 227 companies have invested $137 million in
new industrial and com m ercial buildings.
^

^

Obviously land and labor are essential to the achievem ent of New England’s goals
for 1970, but they are insufficient in themselves: they must be supported by adequate
capital and by resources drawn from other regions — foodstuffs, fuels, minerals, chem ­
icals, fibers — the entire range of materiel that backstops an industrial economy. T h e
ready availability of such resources cannot be casually assumed.




( 17 )

Resources to
Support Growth

NEW ENGLAND ENERGY C O N SU M PTIO N
(Thousands of Trillions o( B.T.U.’s)
2400

240 0

N UC LEAR

2200

2200

N A T U R A L GAS

2000

1800

1800

1

1600

COAL

1400

1200

1200

1000

1000

O IL

------------- 200

------ —I

0
1946

1948




f

1954

1956

1958

1960

1962

1964

1966

1968

o

1970

Fuel is a case in point. New England is devoid of coal or oil resources and its hydro­
electric power sites are already largely developed. Unless existing barriers to oil imports
are removed, or some new and comparatively inexpensive power becom es available,
perhaps from nuclear sources, the region will be forced, between now and 1970, to
spend an increasing percentage of its income on fuel and energy.
New England runs on oil: in 1958 approximately 74 percent of its energy con­
sumption derived from oil, a marked rise from the 1946 figure of 50 percent. T h e use
of coal has fallen sharply. T h e popularity of the autom obile, the convenience of oil
furnaces and stoves, and the dieselization of the railroads all point to a regional annual
petroleum consumption increase of about two percent.

( 18 )

Although New England’s seaboard location strengthens the feasibility of its using
foreign oil, such imports do not move in freely to m eet regional needs. T h e Presidential
proclamation of M arch 10, 1959 restricted imports of crude and residual oils. Crude
oil imports are lim ited to about 12 percent of dom estic crude oil production. As a
result of this restriction, the pricc of crude oil along the eastern seaboard is about 50
cents per barrel above the world price, adding at least $118 m illion to New England’s
annual fuel costs.
New England has a deep continuing concern, therefore, in the development of
alternative energy sources. There is a reasonable possibility that nuclear fuels will
becom e as econom ical as conventional fuels for generating electric power. Already the
region s first nuclear power plant is nearing com pletion and the utility industry is con­
sidering the construction of at least one more such plant by the middle 1960’s. Costs
at neither installation, however, are expected to be significantly below those of plants
using conventional fuels. Even assuming an early technological breakthrough, the
nuclear-generated power which might be available by 1970 would not exceed one
m illion K W of capacity. This am ount could supply only five percent of the energy
consumed in 1958. Obviously New England’s interest in fuel, as in such industrial
raw materials as steel and aluminum, will be best served by active com petition in price
and quality betw een foreign and domestic producers.

%

%

%

M ost New England cities and towns will face a m ajor capital outlay program for
such new facilities as schools, streets, water systems, and playgrounds during the 1960’s.
State governments also face huge outlays for highways, bridges, hospitals, dormitories
and classrooms. At the same tim e business must raise funds for new factories, machinery,
power plants, office buildings, hotels, stores and shopping centers. How arc these
public and private needs to be financed?
B o th the strength of New England’s financial institutions and the volume of the
region’s liquid savings are reassuring. New England is a capital-rich area, and long
experience in financial management brightens the prospect for adequate financing of
th e investment needs of business in the 1960’s. In 1957, for example, the accumulated
volume of liquid savings reached $21 billion, or about $2,000 per person. Continued
savings will bring liquid savings in New England to about $28 billion by 1970, or from
30 to 40 percent higher per person than the national average.
As a result of having such a large volume of funds available for investm ent, New
England’s borrowing rates average lower than the nation’s; both business loan and
hom e mortgage loan rates are generally the lowest in the country. Furtherm ore, since
the region s borrowers do not absorb all the available funds, despite the low rate, the
surplus is invested elsewhere. B u t the availability of funds resolves only part of the
problem of growth; the balance depends on the willingness and the ability of New
England businessmen to use the funds wisely and energetically in expanding existing




( 19)

Financing
Economic
Growth

ASSETS OF NE W ENGL AN D FINA NCIAL INSTITUTIONS
B IL L IO N S

B IL L IO N S
OF

OF

1957

1957

D O LLA R S

D O LLAR S

LIFE
INSURANCE
C OM PANIES

FIRE AND
CASUALTY
IN SURANCE
C OM PANIES

OPEN END
INVESTM ENT
COM PANIES

SAVINGS
AND LOAN
ASSOC.

firms and in creating new ones. New’ England is well served by a complex of financial
institutions able to finance even the m ost optim istic of projected econom ic goals. T h e
uncertain elements are the managerial strength and vision of the prospective borrowers.
Financing the expansion of public facilities is certain to put severe strains on local
and state governments during the 1960's. Conservative estimates indicate that capital
outlays for education and highways alone will total $5.6 billion during the period between
1958 and 1970.
By 1970 there will be approximately 290,000 more children entitled to a public
education in New England. Many of these will be enrolled in the region s private
schools, but the bulk will register at public schools — pushing enrollm ent figures up­
ward by about 222,000. Providing for their needs, replacing presently inadequate
buildings and improving th e quality of education will heavily burden many communities.
It seems likely that education may have to find new sources of financial support.
In recent years, local government capital outlays for highways have exceeded the
capital investment in schools. If past trends hold, the towns and cities of New England
will have to invest about $1.5 billion in highways during the period between 1958 and
1970. T ogether with projected capital outlays of $940 m illion for schools, the local
government capital investm ent programs indicate a marked increase in town and city
debt. Depending on the m ethods chosen to finance the capital facilities, local govern­
m ent debt may rise from $2 billion in 1958 to $3 billion in 1970.




(20)

At the state level, the problems of financing econom ic growth are equally pressing. In each of the six states the techniques for meeting the anticipated demands for
higher education have yet to be established. T h e number of 18 to 21 year olds in New
England will rise by approximately 45 percent between 1960 and 1970. Even if the
proportion of those seeking a higher education were to remain stationary, demand would
greatly exceed any presently contem plated expansion of capacity by the region’s colleges
and universities.
If state governments attem pt the construction of conventional educational facilities
at the rate of projected need, they face capital outlays approximating $400 m illion in
the 1958-1970 period. Such outlays are feasible enough, but other capital investment
needs similarly demand attention and response. Highways alone, without material
expansion of present plans, could absorb $2.7 billion of state funds during 1958-1970.

STATE AND

LO C A L G O V E R N M E N T S P E N D IN G
1957 D O L L A R S

P E R C A P IT A
400

500

1957

NEW
ENGLAND

—

1970

MAINE

MASS.

CONN.

VERMONT

NEW
HAMPSHIRE
RHODE
ISLAND




500

(21)

Providing public facilities to support New England's econom ic growth is only one
of the essential functions to be performed by state and local governments during the
next 10 years. I t is equally im portant for these governments to provide political climates
and tax policies which will enable business, particularly manufacturing, to m eet the
increasingly keen com petition of other areas.
^

^

New England's 1970 economy, as detailed in the following pages, will not and
can not just happen — it must be created through the joint efforts of all th e members
of the regional com m unity. New England manufacturers will b e the architects and
prime movers o f this project. A t the same tim e, government will play a more im portant
role than hitherto. Through m etropolitan and regional planning, government can
insure econom ic growth which best utilizes land resources. Through its public works,
educational and other capital facilities programs, government can support the productive
efforts of its econom ic enterprises. And through sound taxing and spending policies
government can stim ulate rather than stifle econom ic initiative and development.




(22)

T h e projections in the following pages are based on the assumption that New
England’s population will increase by slightly more than one m illion between 1960
and 1970. T his expected increase, which would be the largest ever recorded for the
region in a single decade, is in turn based on projections of New England birth and
death rate trends and on estimates of population movements between the region and
the rest of the country. T h e anticipated rise in New England’s population recognizes
the freedom of the American citizen to move wherever he chooses in search of a better
job or of better living conditions. T h e accuracy of this estimated gain in population
will be determined largely by the decisions of individual New Englanders as to whether
they will remain within or leave the region. In general they are likely to remain if the
region steadily expands its w'ork opportunities at wages and salaries which compare
favorably with those elsewhere. T h e number of new jobs which must be provided
to support a New England population increase of over one m illion by 1970 is estimated
to be 421,000. Projections for major forms of regional econom ic activity indicate that
such an expansion of jobs is realistic. O n this basis it is possible to calculate in rough
magnitudes many interrelated aspects of New England production, consumption,
governmental activities and needs, and uses of human and natural resources. These
pages, then, depict an internally consistent pattern of probable developments over the
next decade.
M ost New Englanders will seek to live in M assachusetts, R hode Island and
C onnecticu t, and particularly in their m etropolitan areas; in fact, over three-quarters
of the population growth will occur in these southern states, as shown on T able 2.
As a group, M aine, New Hampshire and V erm ont are projected to grow by eight percent
compared with the 11 percent growth of their three southern neighbors. Southern
New England will continue to draw workers and their families from the northern
states, with the pull of job opportunities primarily setting the pace of the differing
state growth rates.
^

^

^

Effective use of the labor supply in shaping New England’s econom ic future
provides both its chief opportunity and m ajor challenge. Here, past trends reveal some
of the changes which will influence forthcom ing developments.
F o r instance, although there are now more men in the labor force than ever before,
more and more women are also working. In 1960, about 76 percent of men over 14




( 23)

Labor Force
Projections

years of age are working or seeking work. T h e comparable figure for women is only
35 percent. Since 1950, however, the percentage of male workers has declined,
primarily because of earlier retirem ent and longer schooling, whereas the percentage
of female workers has measurably increased. In fact, more than half of the net growth
in the labor force during the 1950’s was accounted for by women: thus it is evident
that the projected growth in both labor force and employment will not materialize
unless many of the new jobs can be filled by women.
As indicated above, the challenge of growth will be to provide jobs for all those
seeking work in New England, with a goal of 421,000 additional jobs by 1970. M ore
particularly, the goal is 207,000 additional jobs for men and 214,000 that can be held
by women, with the latter thus accounting for 51 percent of the labor force growth.
This job goal assumes that in the aggregate the region will continue to have about 54
percent of its population 14 years and older gainfully occupied. W ith in this over-all
figure, however, are offsetting trends. F o r example, more and more middle-aged women
will be accepting jobs, offsetting the tendency for young people to study longer and
old people to retire earlier. As another example, only 51 percent of V erm onters over
14 will be working or seeking gainful employment, while 57 percent of the same age
group will be so engaged in urbanized C onnecticut.
T hese patterns are significant because incom e, consumption and saving flow from
employment. It is important, therefore, for New England to employ its labor force
with the greatest possible efficiency.




TABLE

2

POPULATION, HOUSEHOLDS, AND LABOR FORCE
(T H O U S A N D S )

Population
I960
1970

Households
1960
1970

Labor Force
1960
1970

70,322

17,380

2,745

3 ,0 55

4,175

4,614

Maine

953

1,018

256

279

364

387

New Hampshire

592

655

165

184

236

261

Vermont

376

404

100

109

133

141

5,147

5,595

1,344

1,472

2,076

2,261

871

943

235

254

360

396

2,383

2,766

645

757

1,006

1,168

N e w E n gla n d

Massachusetts
Rhode Island
Connecticut

Details may not add to totals bccausc of rounding.

(24)

New England’s
Employment

Apart from the upsets arising from W o rld W a r II, three trends have dominated
New England’s em ploym ent changes for more than 40 years. A continuing increase
in agricultural productivity has permitted a steady reduction in farm employment.
Growing complexity of econom ic organization, rising incom e and changing patterns
of social and individual behavior and demands have stimulated growth in nonm anu­
facturing jobs. Finally, the region has struggled to re-employ manufacturing workers
released by the contraction of the textile industry, once the region’s largest. Each of
these three trends will continue to operate in the 1960’s.

TABLE

_

.

3

NEW ENGLAND EMPLOYMENT 1950, 1960, AND 1970
(T H O U S A N D S )

1950

Actual

Population

9,336

Total Labor Force

3,963

1970

1960

Percent
of Labor
Force

Estimated

Percent
of Labor
Force

4,175

100.0%

4,614

100.0%

1950 —
1960

1960 —
1970

+ 1 0 .6 %

11,380

10,322
100.0%

Projected

Percent Change

Percent
of Labor
Force

4 “ 10.2%

+

5.3

+ 1 0 .5

+ 14.4

4" 10.8

+

5.0

+ 10.5

146

3.7

167

4.0

185

4.0

3.817

96.3

4,008

96.0

4,429

96.0

219

5.5

165

3.9

120

2.6

- 2 4 .7

- 27.3

Total Nonagricultural

3,299

83.2

3,561

85.3

4,047

87.7

- f 7.1

+ 13.6

Total Manufacturing

1,441

36.4

1,407

33.7

1,706

37.0

-

+ 21.2

Total Nonmanufacturing

1,858

46.9

2,154

51.6

2,341

50.7

+ 15.9

+

Government

377

9.5

456

10.9

505

10.9

4 -21.0

+ 10.7

Finance, Insurance, Real Estate

139

3.5

179

4.3

219

4.7

+ 28.8

+ 22.3

Wholesale and Retail Trade

639

16.1

703

16.8

726

15.7

H- io .o

+

3.2

Services

347

8.8

438

10.5

471

10.3

4“ 26.2

+

7.5

Contract Construction

144

3.6

168

4.0

207

4.5

4 “ 16.7

+ 23.2

Public Utilities

212

5.3

210

5.0

213

4.6

1.0

Unemployment
Total Employment1
Total Agricultural

2.4

+

8.7

1.4

1 T o ta l em ploym en t reported in C ensus data is greater than th e sum of agricultural and nonagricultural em ploym ent
shown here because nonagricultural em ploym ent is based upon Bureau of L ab o r Statistics data which do n o t include
proprietors, self-employed persons, dom estic servants and unpaid family workers.




( 25)

T h e agricultural sector of New England’s economy will probably release 45,000
workers in the decadc ahead, a smaller number than was released during the past 10
years. (T a b le 3.) This is a continuation of a long-term trend, both regional and
national, that is likely to persist as long as improved techniques, well within the range
of present technology, are employed to increase farm productivity.
N onm anufacturing employment expanded considerably during the 1950’s. In fact,
its growth exceeded the net growth in labor force. T his was due in part to the lag in
manufacturing but mainly to sharp expansion of demand for workers in the nonm anu­
facturing categories shown in T able 3.
In the coming decade, the need for doctors, teachers, lawyers, pilots, truck drivers,
office and other service workers will expand as the population expands. O n the other
hand, automation and other technological advances in com m unication, finance, con­
struction and some other fields should make it possible to expand output with more
slowly growing work forces. T hese individual projections add up to a nine-percent growth
in nonmanufacturing em ploym ent by 1970, somewhat below the 16-percent growth of
the past 10 years. T h e employment requirements in the manufacturing sector may also
tend to lim it growth in nonmanufacturing employment.

The Outlook
for
Manufacturing

New England’s manufacturing prospect m ust be viewed in terms of the output
which can be achieved by the resourceful employment of m en and money. T h e goal
o f greater productivity can best be achieved by capital investm ent which will speed
availability of more and better plants and machines.
For the past 10 years, as in the preceding 30, regional manufacturing employment
trends have been blurred by the continued contraction of textile activities. During
the 1950's, as textile manufacturers released about 150,000 employees, other industries
were helped in meeting their needs for 110,000 additional workers. Although further
reduction in textiles is anticipated, this source alone obviously cannot supply the
additional workers who will be needed by other industries by 1970.
A region devoid of rich natural resources and dependent on manufacturing to pay
for its foodstuffs cannot expect indefinitely to reduce the share of its labor force devoted
to manufacturing. In order to m aintain its position, it must invest in new facilities
and develop new products at a rate which will m atch the progress of com peting manu­
facturers in other regions. Although New England achievem ents are impressive, the
record indicates that manufacturers are not investing rapidly enough to support rising
incom e levels through greater productivity.
T h e data available on investm ent and productivity often seem to obscure as much
as to illuminate the picture. It may still be useful, nevertheless, to consider a pattern of
investm ent and productivity increases that could provide gains in manufactured output
consistent with other facets of the projected 1970 economy of New England. Such a
pattern is presented in T ab le 4.
T h e major values of the m anufacturing projections presented in T ab le 4 arise from




( 26)

TABLE

4

NEW ENGLAND MANUFACTURING PROJECTION
VALUE
O F P R O D U C T IO N 2
1957
1970
Percent
(in millions of 1950 $)
Change

EM PLO YM ENT
1957

1970

Percent
Change

1,431,680

1,705,559

+ 19.1

Durable Goods Total
Machinery
Electrical Machinery
Transportation Equip.
Fabricated Metals
Primary Metals
Lumber and Furniture
Instruments
Stone, Clay and Glass

707,983
189,267
130,807
113,423
94,800
57,388
57,063
39,760
25,475

927,400
234,200
247,400
124,600
122,800
52,000
56,800
57,300
32,300

+
+
+
+
+
-

Nondurable Goods Total
Textiles
Leather and Shoes
Miscellaneous Mfg.
Apparel
Paper
Food4
Printing
Rubber
Chemicals
Petroleum and Coal

723,697
138,176
110,823
107,320
93,863
69,207
64,400 5
62,254
44,853
30,804
1,997

778,159
100,000
118,000
124,300
115,500
83,731
65,900
75,400
55,800
35,800
3,728

Industry

Manufacturing Total

$9,198.3 $12,429.6

+

Projected
Projected
Average Annual
Average
Increase in
Annual Gain
Value of invested
in Output
Capital
Per Manhour
(millions of 1955$)
(percent!

35.1? 6

2.1%

5591.4

+ 44.1
+ 26.8

4,205.4
1,160.9
709.0
662.5
618.0
223.9
336.1
278.8
216.2

6,476.9
1,710.7
1,637.5
917.4
910.7
179.8
303.1
506.4
311.3

+ 54.0
+ 47.4
+ 1 3 1 .0
+ 38.5
+ 47.4
— 19.7
— 9.8
+ 81.6
+ 44.0

2.1
2.2
2.7
1.7
2.3
.3
1.3
2.6
2.2

371.1
147.1
77.2
31.3
43.8
13.1
15.7
23.3
19.6

+ 7.5
-2 7 .6
+ 6.5
+ 15.8
+ 23.1
+ 21.0
+ 2.3
+ 21.1
+ 24,4
+ 16.2
+ 86.7

4,992.9
1,302.2
629.6
572.1
432.3
558.7
404.0
394.3
307.7
392.0
n.a.6

5,952.6
886.5
897.0
623.1
618.7
841.1
392.1
580.4
453.8
659.9
n.a.6

+
—
+
+
+
+
—
+
+
+

19.2
31.9
42.5
8.9
43.1
50.6
2.9
47.2
47.5
68.3

2.1
.9
1.3
1.3
1.6
2.6
.5
2.2
2.5
2.6

220.4
46.5
17.3
26.9
7.7
41.0
15.0
23.6
19.6
22.8

n .a .6

n .a .6

31.0
23.7
89.1
9.9
29.5
9.4
__ 3

n .a .6

i T o com prehend this table it is essential to appreciate the unique m ethod used in its construction and the critical interdependence of its
parts. As a starting point, 1970 employment (C olum n 2) was initially estim ated from national projections by the U . S. Bureau of Labor Statistics
and then refined by regional studies. T h e related 1970 estim ates all resulted from a special analysis of the structure of N ew England m anufac­
turing. T h e need for expansion was determined by the employment projection, and the need for replacement was calculated from the present
age distribution of machinery, equipm ent and plants as shown in T able 5. Th is revealed opportunities for the innovation and diffusion of better
technologies. Their probable impacts on labor and capital productivities were analyzed from a large body of plant data for 1950 and 1V55.
T h e relationships suggested by the analysis were the basis for the simultaneous estimation of book values of capital investment, value added by
m anufacturing and output per man-hour of production worker labor consistent with the projected 1970 employment level and also consistent
with the special technological characteristics of the New E nglan d m anufacturing industries.
Readers are especially cautioned against com paring the Colum n 7 productivity gain estim ates (which apply only to value added) wi
those com m only available for the U nited States (which frequently apply to all o u tp u t). It should also be noted that the investm ent data
(C olum n 8 ) refer to book value of capital assets in 1955 dollars and may not be directly com pared with gross investment data published else­
where by this bank.
.
,
.
,
„. . ,
2 T h ese data are value added by m anufacture and arc not identical with Census estim ates by industry for two reasons: fir s t, they are
based on a sam ple different in size and com position. Second, they are trend values expressed in 1950 dollars.
3 Less than 0.05 percent change.
4 D oes not include dairy industry.
5 1954 figure.
e N o t available.




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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102