predicted revolutionary changes in technology in the major industrialised countries.

Mr. Lloyd Atkinson, executive vice-president at the Bank of Montreal, expects the changes to be more profound than the industrial revolution.

He anticipates social turmoil as a result, but said if economies embrace the necessary changes, countries will have the potential for improved living standards.

Mr. Atkinson delivered a speech, reviewing the economic outlook for 1994, to members of the local branch of the Institute of Directors.

He said the technological revolution had had a profound impact on price cuts in transport and communications and, as a result, intensified competition.

He also commented that at no time in post-war history had he seen centralised banks in the industrialised world so committed to price stability.

Mr. Atkinson said the US economy has steadied. "I think evidence shows a sustained gain in economic activity, but growth will not be particularly robust,'' he said.

"We are now seeing some consumer strengthening in the housing, car and durables market,'' He warned against losing sight of "the forces'' that hold back recovery. He identified those forces as: The huge reduction in defence expenditure; The continuing negative effect of the real estate market; Restrictive local and state government fiscal policies; and Continued lay-offs, as a result of restructuring.

"All these forces are at play, but gradually they are being overcome. Don't forget there are also significant benefits, because financial markets have responded by bringing down long term interest rates.

"One should never underestimate the impact of that reduction of interest rates. That is the one area that was badly in need of repair, and is being repaired.

"I am optimistic about the US economy. It is still the most flexible and dynamic of any in the industrialised, Western world.

"A future trend will be increasing ties between Far East, Japan and the US economies.

He described Europe as "still mired in the mud''. "The UK is experiencing a slight recovery. It abandoned the European monetary system, and had a sharp decrease of sterling against the Deutschmark. That paved the way for steep reductions in interest rates, which fuelled a strong increase in demand.

"However, the momentum of the UK recovery is diminishing. That is hardly surprising since the principle outlet for UK goods is the Continent, and the Continent is still sliding,'' he said.

The continued decline in the economies of France, Germany, Italy, and Belgium is blamed on the "restrictive monetary policy of the Bundesbank''.

"It became restrictive, because of the monstrous cost of the reunification of East and West Germany,'' said Mr. Atkinson. "Don't look for strongly reinvigorated growth in Europe until 1994 or 1995. I expect another three to four million to join the unemployed in Europe, which will put pressure on Governments and their social security safety nets.

"Who would have thought a few years ago that Japan would be reporting decline in economic activity? The stock market, from peak to trough, has declined by over 60 percent. There has been a huge decline in land value and commercial property.

"In a few weeks, the Japanese banks are going to have to report loan losses, with respect to big provisions for loan losses for commercial real estate.

Inside the Bank of Japan, the view is, fundamentally, that the magnitude of company loan losses will parallel that of the US.

"Japan will see some strengthening in 1994, and more vigorous growth by 1995,'' he said.

He said the economic picture in Canada is close to the US, but he does not detect vigorous enough growth to bring down unemployment rates.

Until early 1995, the best outlook is moderate growth in the industrialised world; rising rates of unemployment in Europe and Japan, and not much change in the unemployment rate in North America.

However, he urged the audience not to worry about growth induced inflation.

There may even be nominal price decline,'' he concluded.