Luxembourg economy floats above worldwide recession

By , Business editor of The Christian Science Monitor

There's at least one island of relative prosperity in the industrial world today - Luxembourg. The tiny grand duchy has an unemployment rate of 1.5 percent - or about 2,000 out of work.

However, as Paul Helminger, secretary of state, foreign affairs and economy, acknowleged in an interview here, that's not quite a fair statistic. ARBED, the large steel company based in Luxembourg, has some 3,000 workers not needed to produce steel in today's slack market. They are kept busy in an ''anti-crisis division,'' mostly modernizing the plant.

Mr. Helminger trots around the United States twice a year, looking for American firms interested in manufacturing in Europe. He notes, however, that the main reason for this plant search is not to provide jobs, but industrial diversification for the duchy and its 367,000 people.

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ARBED, with its capacity of 6 million tons a year (only 40 percent used at the moment), provides about half of Luxembourg's industrial production, 45 percent of exports, and 16 percent of gross national product (GNP), the total output of goods and services.

''We have a situation of a shortage of skilled labor in the country,'' Mr. Helminger said. Some workers drive in for Luxembourg jobs from nearby regions in France or Belgium where unemployment can be as high as 25 percent.

This year Luxembourg's GNP will be down a minor 0.2 or 0.3 percent, Mr. Helminger estimates. Next year he expects production to be flat, though others forecast 1 percent growth.

Luxembourg's plant-luring activities have had some success. Guardian Industries started operations early this year in a new glass plant. E. I. Du Pont de Nemours & Co. has started construction of a $60 million plant to produce plastic sheets. National Aluminum is building a $50 million foil rolling mill. And Mr. Helminger hopes General Motors' Delco division will construct a technical center in the electronics area.

''We are in excellent shape compared to others,'' he says.

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