Historical aspects of the Welsh slate industry

D Dylan Pritchard MA FSS

  1. No study of investment in the slate industry, particularly during the last half century, can be anything but superficial unless close attention is paid to fluctuations in building, as it is obvious that the attractiveness of an industry from the investor's point of view is determined largely by the state of the market for its product.

  2. Despite the fact that building plays, and has played for so long, such an extremely important part in our economy, very little is known about its history. It seems probable that the lack of comprehensive and reliable data upon which to base their studies has discouraged economic historians and statisticians from entering upon this field of study with the result that little is known about the behaviour of the building industry prior to the last war. For the purpose of this article a tentative effort has been made to throw a little light on this matter by constructing an annual index of the volume of residential construction from 1891 to 1938; this index is given in Table A and shown graphically in Graph A.

  3. In our last article we noted that the ‘nineties was a period of hitherto unparalleled activity in building and that the opening decade of the new century brought with it a new phase in the history of the industry. It is practically certain that no net decrease in the labour force of the industry occurred during any decade in the Nineteenth Century, but between 1901 and 1911 the number of building operatives fell from 953,000 to 887,000, showing a net loss of 66,000 workmen. A glance at Graph A will indicate how great was the building boom between 1898 and 1903 and how marked was the slump during the subsequent decade.

  4. By 1905 unemployment among carpenters and joiners was as high as 8 per cent; only twice in the black years 1879 and 1886 had unemployment among carpenters exceeded this level since unemployment statistics were first compiled in 1860. By 1909 unemployment had reached the unheard-of level of 11.7 per cent.

  5. There were several indications that building activity was once more gathering impetus when the Great War broke out and virtually crippled the industry. Building was impeded by financial stringency, increasing scarcity and rising cost of materials and labour, and by an Order issued by the Minister of Munitions in July, 1916, prohibiting in all cases involving an outlay of over £500 the construction, repair, alteration or decoration of buildings except under licence. Graph A shows that house building was reduced to the merest trickle after 1915.

  6. Graph A also shows the course of residential construction in the interwar period. The index rises sharply between 1918-22 and then after a failing in 1923, it registers a phenomenal expansion until the peak year 1927. The index falls sharply in 1928, oscillates around a high level between 1928-32, and then another remarkable spurt is indicated, greater even than between 1924-27. The boom reached its highest point in 1936-37 when the level of activity was much higher than during the boom in the late 'nineties. There was a slight slackening of activity in 1938 and the first part of 1939. The outbreak of war had drastic repercussions on the industry and the volume of residential construction once more has been reduced to a trickle.

  7. It is possible at this stage to draw certain conclusions about the nature of fluctuations in building activity. It is clear that there is in building a rhythmical ebb and flow in activity, boom alternating with slump every six to ten years, and in behaving in this manner building falls in line with the periodic cycles of boom and depression which have characterised trade and industry for two centuries. That there is a close relationship between these short cycles of building activity and cycles of new investment in the slate industry is to be expected, and the existence of such a correlation during last century was amply demonstrated in our previous article. 

  8. Graph A indicates that building is also subject to a long-term cyclical movement which is peculiar to it alone. Houses, factories, and other types of construction have a long life so that a period of over-construction is usually followed by a prolonged period of liquidation; the supply of buildings of various sorts cannot be reduced at will and they are so durable that overproduction is not self-liquidating as in the case of articles which need rapid replacement. So that the building industry, because of the nature of its output, tends to have prolonged cycles of considerable amplitude; cycles in the production of shoes, clothes, and other consumption goods are shorter and less violent, because supply is much easier to control and any overproduction is quickly self-liquidating. Actually, what we find in the building industry are long-period major fluctuations in activity, upon which are superimposed the much shorter and less violent cyclical fluctuations which characterize industries generally. Major cyclical fluctuations in building successively reached their peaks in 1875-77, 1898-99, and 1936-37. The last great upward swing in building activity would probably have commenced some five years earlier were it not for the outbreak of war in 1914. Superimposed, upon the upward swing of the major cycle which reached its acme in 1936 we have two minor boomlets which had their peaks in 1922 and 1927 respectively. It is interesting to note, incidentally, that as the major boom had reached its highest point in 1936 it would have been followed by a prolonged downward trend in the volume of building. On the other hand, it is practically certain that economic forces would not have been allowed to operate freely and that State subsidisation of housing would to some degree have succeeded in counteracting the forces making for contraction. This point, however, has only an academic importance at the present time because the virtual cessation of new civil building since the outbreak of hostilities, the havoc wrought by enemy air attacks, and the recent assurance given by the Minister of Health that it is the Government's intention to continue to subsidize dwellings provided for slum clearance, to eliminate overcrowding, and to meet the need of agricultural workers, have together assured the future of the industry for at least a decade after the war.

  9. In our last article we saw that towards the close of the last century certain factors were operating both to reduce the volume of, and to reduce the cycles in, investment in slate quarrying, with the result that the, major building boom in the late ‘nineties was not accompanied by anything in the nature of a boom in quarrying investment. Similar factors have operated throughout the present century and it is highly significant that the volume of new investment has been so very minute that the correlation between cycles in building activity and new investment in quarrying, which was so characteristic of the 'fifties, 'sixties and 'seventies of the last century, has been barely perceptible.

  10. That the slate industry failed to attract new capital during the great building depression prior to the last war, is not to be wondered at. On the other hand, that the industry attracted little capital during the interwar period, when the demand for roofing material was soaring to record breaking heights, presents a problem to which no short and simple answer can be given. The problem can only be solved when all the factors affecting the present position and future prospects of the industry have been gone into in detail, and that we hope to do in future articles.

  11. The bare outline of developments since 1885 in the slate industry of North Wales are brought out in Table B.

  12. It is fairly clear that the history of the industry falls into three distinct stages. A period of steady expansion and great prosperity ended in 1877. This was a period of great speculative activity, with a great volume of new capital being sunk in the industry. The second period was one of instability, with the industry passing from acute depression in the 'eighties to moderate prosperity in the late ‘nineties, when output was slightly lower than in the 'seventies. In this period only a very limited amount of new capital was attracted, and it was characterised by financial retrenchment and reorganisation on the part of many existing concerns and the principle of amalgamation made some progress, the Oakley concern being the best example of these developments. The third period has been one of contraction, and, as Table B shows, the output of the industry prior to the present war was only slightly more than half what it had been at the end of the last century. There has been comparatively little new capital investment in the industry during the last forty years, and this period is noteworthy because of the great fall in the number of business units in the industry. In 1900 there were 84 business units engaged in the production of slate in North Wales, but in 1937 there were only some thirty concerns; this 
    numerical decrease was mainly due to the closing down of the less prosperous marginal concerns and, to a much lesser degree, to the extension of the principle of amalgamation.

  13. What of the future ? That question is implicit in all that has been written in this article. At this juncture, the author will merely make the bald statement that he can see no real reason, provided certain things are done, why the industry should not, after the termination of hostilities, enter upon a period of prosperity and expansion.


Investment in the Slate Industry 1830 - 1930 Part 4

Quarry Managers' Journal April 1943



Plas Mawr Conwy North Wales