WORLD WAR I

World War I and its early aftermath gave an immense fillip to demand, activity and investment in all the basic industries. In doing so it paradoxically helped worsen their prospects of adjusting successfully to the new trading conditions that lay beyond; it pushed industrial Britain further in what was later to be seen to have been the wrong direction. Its immediate effect was to cut back business in other industries and boost activity in the heavy sectors of the economy to unprecedented levels. Between the Censuses of 1911 and 1921 there was a 300,000 increase in employment in engineering, shipbuilding and iron and steel. From the outbreak of war to the peace treaty in summer 1919, growth in shipbuilding was even more dramatic. However, whereas until the war the industry had seemed unassailable by overseas competitors, now some of its inadequacies became all too apparent.

Naval construction necessarily received priority attention, but in an age when nations, rather than merely armed forces, were seen to be in deadly contest with each other, and when the submarine exposed for the first time the extreme fragility of the UK's resource base, merchant shipping was also vital. During the four years preceding the war some £60 million was spent on new construction for the Royal Navy; in the four years of the war, between £250 million and £300 million. By contrast, notwithstanding the huge losses by enemy action, mercantile construction in the five years 1914–18 was only 72 per cent as large as in the previous five years.