Structural change and energy efficiency in industry

The change in the ratio of energy consumed to industrial production is examined over the years 1968–1980. Changes in the composition of industry are analysed, creating a better picture of movements in physical efficiency of energy use. The medium-term trends show the significance of the 1973 oil crisis, the effects being contrary to those of intuition. The implications of the two recessions for efficiency and industrial structure are described in detail. The role of demand, often relegated to an incidental consideration, is brought to the fore. In the years following 1973 it appears more important than ex post substitution in production, and with this comes a particular implication for the use of aggregate production functions.