BELOW CAPACITY WORKING AND POTENTIAL OUTPUT IN SCOTTISH MANUFACTURING INDUSTRY.

The article constructs a capacity utilization indices for six industrial groupings in Scotland for the period of 1977 to 1986 by using disaggregated data from the Confederation of British Industry (CBI) Industrial Trends Survey. It combines the indices with Index of Industrial Production data to obtain a potential output series for each grouping. It declares that the derivation of the capacity utilization index are lower than that of the more traditional methods in Dewhurst Frobes and Parillo (1983), but they are considerably higher than the estimates derived for the United Kingdom data. It concludes that the analysis in the article may provide a way of incorporating part of those perceptions in any exercise to measure the impact of proposed changes in policy.