nt is
used at no more than 50 to 60 percent of capacity. New plants completed
in 1967 had not reached full production in 1972. Productivity has also
been kept low by the lack of mechanization of auxiliary activities, such
as loading and unloading, inter- and intrashop transport, and
warehousing. In 1972 the minister of labor and social welfare stated
that labor productivity in Bulgarian metallurgy was only half as high
as in some of the advanced industrial states.

The presence of unemployment has never been officially admitted, but a
certain degree of unemployment and underemployment, nevertheless, exists
in several rural areas of the country. Recognition of this fact was
evident in the decision of the BKP Central Committee plenum, published
in March 1970, on the territorial redistribution of production forces
(relocation of industry) and in subsequent economic studies concerning
this subject.

PRODUCTION

Gross industrial output amounted to about 13.9 billion leva in 1970 and
reached 15 billion leva in 1971. According to official data, industrial
output more than tripled in the 1960-71 period. The high average annual
growth rate of 11.1 percent was accounted for, in part, by the low
initial level of industrial development, as a result of which relatively
small absolute increases in output were equivalent to high percentage
rates of growth. The contribution of industry to national income (net
material product) rose from 46 percent in 1960 to 50 percent in 1969 but
declined to 49 percent in 1970.

The most rapid growth occurred in basic industries that were given
priority in the allocation of investment and labor. Production of the
iron and steel industry rose almost ninefold, and the output of fuels,
chemicals, and rubber increased more than sixfold. The output of machine
building and metalworking industries increased 5-1/2 times, and the
production of electric power, building materials, and cellulose and
paper rose about fourfold. Preferential development of basic industries
continued through 1972.

The lowest growth rates among basic industries were attained by the
timber and woodworking industry and nonferrous metallurgy. Some foreign
observers have wondered when the available nonferrous ore reserves have
not been exploited more intensively. As for timber production, its
volume has been restricted by the limitation of forest resources.
Production by consumer goods industries generally increased by from 2.1