LOOKING UP.

Auckland Star, Volume LXIV, Issue 190, 14 August 1933, Page 8

LOOKING UP.

TRADE IMPROVES.

BUYING CONFIDENCE.

REPLACEMENT OF STOCKS.

BTTTTEB. AT 90/ PER. CWT.

Happier days are hero again!

"With the approach of spring and the maintenance of the increased prices for staple commodities, New Zealand'is on the threshold of distinctly better times, according to the forecasts of prominent Auckland traders and commercial authorities, whose operations over recent months have, detected:

(1) A steady improvement in business. (2) A feeling of quiet confidence in buying. (3) A more optimistic outlook. These are the first practical reflections of the more buoyant tone of the overseas markets, where butter for the first time since November, 1932, is commanding and maintaining a price of 90/ per cwt, wool is holding the. increased figure it recently gained, and meat prices are considerably better than they have been for months, and of the local stock market, where the value of all securities i 3 at least 25 per cent higher than it was for the corresponding period of last year.

The process has been, and will continue to he, gradual. The whole of the retail trade, it is considered, will not immediately share in the improvement; some concerns will benefit more rapidly than others. That the advance noticed has been steady is hailed as a good augury, representing, as it is, claimed to, the march toward recovery on a concrete pathway. Artificial barriers. to trade continue to act as a brake on the commercial wheels, and the view was freely advanced to-day that if _ the present adverse exchange and additional taxation imposts were removed, the final impediments to development of the present movement would disappear. Readier Selling. The information was advanced by a prominent merchant, whose company liandles a wide range of items, that even before the London market began to look up'business locally was inclined to improve, notwithstanding adverse conditions. There had been nothing one could point to as a definite mark of increasing business, and it was only by comparison with the results of the trading of the previous year that the true position could be assessed. At present there, was a very much better feeling—a feeling of quiet confidence. - "Here is an example," he added. "With respect to one line of imported goods, we would never have dreamed of being able to sell any supplies before they arrived. For 'the-last few months all our monthly shipments have been sold before arrival, These are the little straws in the commercial wind from which ■ we gain our direction. In some cases .people are now ' inclined to book iip for three months ahead. That is another good indication. ■ There ris not a great volume, but the, business is, being done in a confident''manner.'" Another point mentioned was that two years ago most business houses were faced with the heavy, carrying of stocks which had been.aequired at fairly expensive prices. With the falling off in the demand for the higher-priced goods had come a writing-down- of values to enable stocks to be quitted. That and allied problems had now been adjusted, resulting generally in a' restoration of confidence in trade.' The business man to-day felt he was buying in the best market, and instead of being handicapped by high-priced stock on a falling market, he was able to obtain his supplies at normal prices, which provided for a reasonable margin of profit. He. had gone through a tedious period of adjustment, to lower values, but that process - had been largely accomplished, and the view of the business man to-day was that he was "staggering through" to something better. Shortage of Stocks? It was pointed out by another authority that any sudden jump in the buying demand of the public would catch the stocks of most lines fairly "short," and that would have a tendency temporarily to harden prices in many classes of businesses which had been quiet for a Ion"- time. During the past two years trade generally had been marked by very cautious finance, and none had been disposed to tie up money in stocks which had no prospects of remaining liquid. "To-day," he added, "there is a great deal of more confident buying. We know what our business Is likely to want, and turnover is settling down to a gradual growth instead of a steady decline. The merchant therefore is able to buy with more confidence, knowing that the public will take the goods. The beauty of the improvement is that it has been gradual, which means that it has a basis of stability. Two years ago stocks were quitted* at sacrifice prices. To-day we are getting a better turnover and at normal prices." According to the- principal of a large furniture and upholstery concern, an appreciable improvement in that class of business has been in evidence for the i last three or four months. The advance was interfered with by the intervention of "Prosperity Week," but it was expected to be regained now that the campaign had ended. In the better buying atmosphere which had prevailed, purchases had been made without the "haggling" which had hitherto been encountered. The maintenance of newspaper advertising had been a big factorin the development of trade in the period referred to. Quota Talk Effect. "Up to the time they started talking < about a quota on our primary produce exports to the United Kingdom, there was a definite improvement in our Imsiness," said the head of one of Auckland's leading emporiums. "That scare checked it at once, particularly with regard to our orders from farming clients. Fortunately, the restriction discussion has died down, and things are again looking up. An example was provided in our last 'half-price' day, when the returns were considerably ahead of the takings for the same day and sale of 1932. In my opinion, if the volume of. our primary produce exports to the Home market is maintained, we are in for considerably better times, especially if we give effect to our part of the Ottawa agreement. At present | business seems to be settling down, and there is a welcome absence of nervousness and timidity. Our figures show that we are not going down on last year's returns, and it looks as though

rock bottom has been reached. All the I elements are present for a gradual improvement." Silent Parliament Helps. The opinion that the long Parliamentary recess had engendered a greater measure of confidence in the community was expressed by the principal of a large retail establishment, who said that traders were not looking forward to the time when the House of Representatives reassembled. "The present indications are," he said, "that trade conditions will be much better than they were last year. Already we have experienced better trade since we opened our new season's lines than was the case during the previous year. The same improvement was shown last month. There is nothing to justify an improvement in the Dominion as a whole, beyond the fact that the people, I think, are a little more settled in themselves, owing to the shutting down of Parliament. There is no doubt about it that there is a little more confidence in the community, and I think there are indications for improvement for the coming season."

Exchange "Killer." "No, I cannot say there has been any marked improvement with us—the high exchange continues to hang over everything," said the manager of a large warehouse. "You cannot expect traders to order large quantities of stock in these circumstances. I feel certain, however, that'if the exchange were removed the response would be prompt. At the moment it is the exchange that is the 'killer.' Of course, we have to go ahead even if the retailers don't, but we feel, with the exchange as it is, that we are sitting on the edge of a volcano. There is no doubt about the hardening of price levels oversea, and the Home people ■ and the agents are trying to make the most of it, but wo cannot make much progress in business until the exchange is lifted. _ Tariffs and sales tax. as well, are acting as a barrier towards improved conditions."