More Out Of Work Next Year?

Press, Volume CVII, Issue 31564, 29 December 1967, Page 8

More Out Of Work Next Year?

Employment conditions next year will be extremely depressed, says the New Zealand Institute of Economic Research in its December quarterly predictions.

There is no reason to assume any significant rise in wage rates, and there is the prospect of a substantial increase in unemployment, the report says. There is the likelihood of a general wage order, but it seems unlikely that the Court would be prepared to make a substantial order in present circumstances.

In any event, the tight economic conditions likely to be prevailing in 1968 suggest that ruling rates would be most unlikely to reflect the full extent of any general wage order. The institute forecast of domestic outlay suggests that total final demand (excluding stock increase) will rise about 5 per cent The direct price effects of devaluation are likely to be about 5 per cent, and there will be some consequential price increases. As well, the full annual increase resulting from the economic measures last May and the October increase in electricity charges has not yet been felt.

The forecasts thus imply a fall in domestic outlay in volume terms.

It is quite clear that in the longer run devaluation is going to have a very marked effect indeed on farming incomes, says the report. Farmers’ incomes are ex-

pected in the 1968-69 season to rise 8100 m above the 8290 m earned in 1'966-67. Although this represents a very large short-term increase it comes after a depressed period. The institute expects no more than a slow growth in company incomes, and does not see 1968 as being buoyant

The expected fall in volume of domestic outlay suggests depressed trading conditions. However, in some areas there will be some fairly strong offsets, mainly from farming and exporting.