BUSINESS IN N.Z.

Alexandra Herald and Central Otago Gazette, Issue 1576, 16 February 1927, Page 2

BUSINESS IN N.Z.

E6ONOWG QRGAHISATIOM A VALUABLE BULLETIN Bulletin No. 24, prepared by the Economics Committee Of the Canterbury Chamber of Commerce, discusses the economic organisation of New Zealand, dealing with the relations of .primary and, secondary industries. I.—PRODUCTION AND OCCUPATIONS. A preliminary survey of production * and. occupations was undertaken in Bulletin No. 22 of this series. It showed in brief that, according to the official figures, the total value of net production in New Zealand approximated £106,000,000 in 1923-24, the latest year, for which figures are available. The shares of total production contributed by the primary and secondary industries respectively have varied little since the beginning of the present century, the primary industries contributing from 71 to 73 per cent., and the secondary industries from 27 to 29 'per cent, of the total. Within the primary industries group the proportion contributed by agriculture, mines, forests, and f iheries has fallen considerably daring the past twentvfive years, that of the" pastoral industry has fallen slightly, while the shar-j contributed by dairying has increased greatly. Under the official classification used for estimating the value of production in which the output of meat works, dairy factories, etc., is included under primarv products, the net factory production was £19,000,000. Bat auder the different official -classification of secondary industries, the gross product of these industries for 1923-24 was valued at £77,000,000, which is the figure most commonly quoted; the net product, or value added at current prices in the manufacturing processes undertaken, was £30,000,000. Analysis of the secondary industries, however, shows that the largest .utmost important of the secondary industries are engaged in preparing primary products for market—animal foods account for £33,000,000 of .he total gross product—and there is a further important group engaged in supplying essential local services, >uch as neat, tight, and power. Bat the initial production, or the creation of economic goods, although fundamental and of first importance, is not the whole, of economic life. Production and exchange most both be financed, and the goods produced have to be collected and distributed throughout the community and the world. Hence a considerable part of our resources, both human and material, are devoted to transport and comma nicatiou. commerce and fin nice, administrative, professional, and other ■services,, all of which arj more or less directly interconnected with production. The distribution of population amongst various occupations varies from country to country, and depends mainly upon marked differences in resources of production. A signifieiirt comparison of these variations is presented in "the 1921 Census Report, where the New Zealand occapatiins have been so classified as to make 'hi n directly comparable with those of South Africa'andvef England and Wales. '"''. INDUSTRIAI. DISTRIBUTION OF jj POPULATION. ■ f - (Percentages.) : -& '-■••' -' ■£ g .5 3 . v. ■}.—. . OfSPrimacy production 27.8 34.0 14.2 iJSrial _ ... ... 3-8 18.4 33.8 Transport. crrnmrrcial. profo.2o.aL etc ._ _ ... »M 46* Total I00J)' 100.8 100.0 In each, of these countries about half the employed population -is engaged in directly productive occupations, the percentages being 49.6 in the case of New Zealand, 52.4 for South Africa, and 54.0 for England and Wales. But South Africa has nearly two-thirds of her producers engaged in primary production, England and Wales has 'little more than onefoarth. and New Zealand about foursevenths; the remainder in each case are employed in industrial production. Those engaged ifi services which are not directly productive—the commercial, transport, and administrative services, etc. —number slightly more than half the total in New Zealand, and a little less than half in the other two countries. , •* ..;'j IT. DISTRIBUTION OF OCCUPATIONS. The root causes of the differences in industrial organisation here revealed lie very. deep." They are to be found in geographical differences, in the widely different types of physical resources which are the basis of all production. South Africa's mineral wealth, her sparse population, and her wide expanses of veldt make bier mainly a country of extractive industries. Britain's endowment of coal and iron, her unique geographical position at the centre of the world's trading peoples, and her dense population make her mainly a manufacturing and commercial country; New Zealand's wealth of soil and climate, combined with her position remote from centres of world _. production and trade, and her sparse ~ population, make'it inevitable that her chief products should ' come directly from the soil and be exported in the most concentrated form, such as animal foodstuffs and wool. The- usual broad division of oar industries into the primary and secondary industrial groups, though useful and necessary for statistical classificavtion, is unduly simple and is therefore misleading. A much truer picture is presented in the following classification of persons eniploved in the dominion (from the 1921. Census Report). De- - tailed figures are given only where over 5/)00, and fiwn to the nearest thousand. DISTRIBUTION OF OCCUPATIONS. '= c? -3 £s „ e 2 £~ Primarv production (dairjmg. SSJOBb: dtecp {arming, 32,000; agriculture. 17.000; mrxed farming; 11.000: forestry, 10400; mining. B.OKH ._ _ _. ... 152,090 273 Industrial production (building. &000; food.. drink, and tobacco, " AOOO: engineering, 13.000; road and raihrav construction, 8,000; booki and printing. 3,000! ... ... _| ... 113.000 2LB Commercial, (propertv and finance, 13.000; textile Index, etc, 14,000; mixed businesses. TOfiK} ._- ~. 7V»O 145

Transport and communication (railways, 15,000; post and telegraph, 10,000; shipping, 8,000; carrying, 6,000; on wharves, 5,000) ... 55,000 10.1 Professional (local and general government. 9,000; law and order, 5,000; health. 11,000; ■ education, 15,000) 52,000 9.5 Domestic and other groups (domestic service, 22,000; hotels and , boarding-houses, 14,000; independent, £,000; not stated, 13.000) 88,000 16.1 Total breadwinners 546,000 Dependants 673,000 Population (excluding Maoris) 1,219,000 This classification shows that more than a _ quarter of our occupied population is engaged in primary production, a little over a fifth in industrial production, and just over half in other Sursuits which are not directly prouctive. The primary industries are a homogeneous group easily recognised, and consisting mainly of farming of all kinds, timber, and mining. But the industrial group is decidedly heterogeneous, and includes all the minor industries of the dominion, road and railway maintenance workers, refuse collectors, undertakers, and all the miscellaneous repair industries, such as the village blacksmiths, plumbers, carpenters, painters, etc. in. THE CLASSIFICATION OP INDUSTRIES. The census classification of occupations is the best available for a composite presentation of the distribution of our population throughout the various types of employment, but for an analysis of the nature of oar industrial production it is better to refer to the official classification of factory production. A factory is here defined as an " establishment engaged in manufacture, repair, or preparation of articles for trade or export which employs at least two hands or uses motive power." Hence repair shops as well as factories are included, as long as two employees are engaged or motive power is used, and a large number of very small businesses supplying purely local needs come within the classification. The following is the official classification of these industries:— FATORY PRODUCTION, 1923-24.

The fortunes of these industries are greatly influenced by the conditions governing the marketing of their outpat. But the market conditions under which they sell their products differ greatly, and the differences) which are not apparent in the above official classification, are of great practical importance at the present time. It is well, therefore, to regroup these industries in a way that, will reveal these significant differences in market conditions. Tins rearrangement has been attempted it; the table given below. Group I. contains industries manufacturing primary produce mainly for export, but partly for the local market. Group H. includes industries producing mainly, and as a rule wholly, for the local market, but subject in small degree to the competition of imports. Group HI. comprises industries producing usually for the local market only, but subject in considerable degree to the competition of imports. SECONDARY INDUSTRIAL GROUPS.

The products included in Group 1.1 have to be sold as a rule in competi- I tire overseas -markets, after meeting transport costs to those markets. They I arc entirely., unsheltered against the! competition of rival producing countries. The products of Group 11. enjoy an almost completely sheltered local, market, for, though a fraction of the products classed as glass, publications, vehicles, etc., may meet some competition from imports, the bulk of the products included in this group has the. local market to itself, either because the product must be loclly produced to meet particular local needs, as in the case of repair - industries, newspaper publications, and heat, light, and power, or because, an in the case of bulky goods, such-iis stone and clay goods or furniture, transport costs from overseas are prohibitive. Group 111. contains almost all tho products which are subject in appreciable degree to the competition of imports.' But some part of each class in the group is not subject to such competition. Vegetable food is mainly flour; wood products include the output of saw-mills and sash and door factories; non-pre-cious metals include -Jl the engineering repair industries; and a considerable part of saddlery, apparel, and the other classes is either repair work or has for other reasons a secure and sheltered loca! market. , Tho net output of this group is valued' at 12.9 millions. If allowance be made for repair .work and the proportion of new output in each class which enjoys a secure local market, then the remainder of the output of this group is perhaps worth, at a generous estimate, about eight millions. The residue is sheltered in that competing imports have to pay transport costs to the local market, and in most cases pass a Cus-

terns barrier as well, but it does not enjoy a secure local market as do most of the products of Group 11. Analysis of secondary industries grouped along these lines is essential to any effective consideration of the relations and relative importance of our various industrial interests. The net total product of New Zealand is valued at 106 millions, that of the industries which really have to meet foreign competition in the local market is in the neighborhood of eight millions, or less than 8 per cent, of the whole. The product of the big export industries (pcstoral and dairying), which meet world competition in our export markets, is fifty-eight millions, or about 55 per cent, of the total. The remaining 37_ per cent, of our production, both primary and secondary, is sold in a naturally sheltered local market. The chief economic difficulties of the dominion in the post-war period are traceable to the disparity between prices and costs throughout these groups .of industries. The sheltered industries still receive high prices for their output, many of these prices being in the neighborhood of double the pre-war level. The unsheltered industries have the prices for their produce determined by overseas competition, pnd these competitive prices -cluster round about 50 per cent, above the prewar level. The price received' by the sheltered industries, as well as those of the various commercial and transport industries, determines costs in the unsheltered industries, and in many cases these basic industries cannot make costs and prices meet.

•5= J, . 1*1 * •5 " -S- -, _- i — f Claw "of. Product. >==' _ 3 0 v = §= = >z3 5 s - •§ £c3 5 Animal food 33.1 6.4 G.8 1.7 8.5 1.9538 130 Vegetable food Drinks. etc 1.9 .1 1.2 211 Other animal matter 1.1 0.5 0.4 6fi Wood products Heat, light, and powei 5.9 4.3 4.6 2.3 3.3 15.8 025 146 Slone. clay, glass 1.9 ..:, 1.4 166 Xoti-prccious metals Publications 3.1 3.6 1.9 1.9 375 1.9 ".'2 2.2 738 ueain»Tifcarv ana saddlery Furniture 3.0 1.4 J.8 D.7 0.6 0.9 161 294 Chemicals, etc Texiiles ._ 1.0 1.5 1.4 ).7 0.5 0.8 69 16 Apparel ... Other classes Totals 3.9 2.7 77.0 30 1.8 1.7 .0 1.6 2.0 45.5 311 342 4,471

Product. c _c II Group F.— Agimal food ... — ... Other animal matter ... 33.1 ... 1.1 6.8 0.5 538 66 Totals 34 Group II.— Drinks, etc 3 Heat. light, and power... 4 .Stone, clay, and glass ... 1 2 7.3 604 9 1.1 211 .6 2.2 146 .9 1.5 166 .(j 9 7 »i Vehicles ... Furniture ... 1 ... 1 .9 . .4 1.2 0.7 738 294 Chemicals ... 1 XI 0.4 60 Totals .. 16.3 9.8 1,907 Group HI.— Vegetable foodWood products Non-precious metals ... LertfWware and saddle Textiles ... ... Other class*!* ... ... ... 6.* ... 5.9 ... 3.1 ry 3.0 1.5 ... 3.9 ... 2.7 1.7 4-3 • 1.9 0.8 0.7 1.8 1.7 130 625 375 161 10 311 342 Totals ... ... .. 26.5 • 12.9 1,960 -* - —— u 30.0 4,471