Germany in Second Place

Almost unnoticed, a startling shift of economic power has taken place: West Germany has toppled Britain from its position as the world's second-ranking (next to the U.S.) exporter of manufactured goods.

The change occurred in the last months of 1958. British manufactured exports leveled off to about $7.5 billion, while the Germans reached and passed this point, reported the London Observer's Economic Editor Andrew Shonfield.

The Germans are gaining on the British not only in Western Europe but, surprisingly, in Britain's own sterling area as well. The Jan. 1 opening of the six-nation European Common Market--with West Germany in and Britain out--should do more to widen the gap.

Instead of capital investment abroad, the Germans have been more interested in vigorous trading, preferring to sell on faster deliveries, better-designed products, and, in some cases, cheaper prices. The British setback had been obscured by the pleasant short-term fact of prosperity in Britain's trade and payments balance. Britain has done well in the lush dollar markets, less well elsewhere. Last year Britain earned the biggest surplus of foreign exchange in its history. But it was achieved mainly by holding down imports--at the cost of limiting production and consumption at home--rather than by energetic and expanded sales abroad.

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