Millennium Bug Watch

BRITISH COMPANIES are quietly beginning to stockpile products, just in case things go badly wrong as more and more computers approach the end of 1999.

A biannual study by consultancy company Cap Gemini recently found that half of the companies contacted are starting to identify alternative business partners and a fifth are already actively planning to stockpile essential raw materials in advance of the century's end.

The only trouble with this cautious, purely precautionary and not-at- all-fearful approach, say economists, is that even if the Millennium Bug doesn't hit in any significant way, such stockpiling could trigger exactly the same damaging economic effects as if it had.

It works like this: if companies have built up stocks of raw materials against expected bad times, they will cause a mild economic boom next year because they will be buying not just for now, but for the expected post-millennial bad times.

But come the year 2000, they won't need so much stock as in 1999, because they will have all of that surplus left over.

The deflationary effect will hit sales and slow down economic growth.

Isn't that the same as having all sorts of computer crashes caused by flaky software? Yes it is.

It seems that the Millennium Bug is going to get us after all - either one way or the other.