BUSINESS CONDITIONS.

Auckland Star, Volume LXVII, Issue 170, 20 July 1936, Page 4

BUSINESS CONDITIONS.

COMMERCIAL SUMMARY. PRICE LEVELS DISCUSSED. Iu the July issue of the "Chamber of Commerce Journal" business conditions in the Dominion over the past 16 years are shown in chart form. Commenting 011 the results, the journal says: — The improvement in evidence in recent months continues. Healthy, favourable tendencies are shown by the series for export prices, and the various other series that have proved themselves in the past as good indicators of economic conditions (even including the usually sluggish series for excess of arrivals over departures). The ratio of bank deposits to advances and the excess of exports over imports (both of which had temporarily reached unhealthily high levels under the drug of high exchange) have lately shown more normal levels. The excess of exports over imports has now fallen to a figure that corresponds roughly with our annual oversea interest bill, suggesting that conditions in New Zealand are at last becoming more nearly adjusted to the higher exchange rates New Zealand on London introduced in January,- 1933. Sympathetically the net overseas funds of the New Zealand banks (the accumulation of which had caused some concern in 1933 and 1934) have shown a falling tendency. With the recovery in the world prices of wool, dairy produce and various other pastoral products that manifested itself in the last few months of 1935, the ratio of the prices of exports to the prices of imported commodities (which had been persistently. below normal since the end of 1930) is now approximating to unity. This situation, if it is maintained, will mean, that it no longer requires-more .than tly; usual- volume of exports to buy unit volume* of our staple imports. v.NOjCievl'ce D f "guaranteed prices" or any dther device can prevent New Zealand suffering when the prices realised by our staple exports in the world's markets are lower compared with the normal levels than the prices we have to pay for our imports in those same world markets.