The Press TUESDAY, AUGUST 27, 1968. Export Successes

Press, Volume CVIII, Issue 31768, 27 August 1968, Page 16

The Press TUESDAY, AUGUST 27, 1968. Export Successes

One of the most encouraging developments in the New Zealand economy this year has been the growth of exports of manufactured goods. These exports rose in value from $4O million in the year ended June, 1967, to $64 million in 1967-68. Of this $24 million increase, perhaps $5 million can be put down to the immediate effect of devaluation; that is, the predevaluation quantity of exports sold at the same prices overseas would be worth $5 million more in devalued New Zealand dollars. The remaining $l9 million or so represents an increase in the volume of exports of manufactured goods. The definition of “ manufactured ” goods for this purpose, though it may seem arbitrary, is in accordance with international practice. It includes horticultural products, forest products, fish products, petroleum, and “other manufactures”. Forest products ($3O million) and “other manufactures” ($27 million) account for all but $7 million of the total. Pulp and paper exports alone rose from $l7 million to $24 million. This substantial increase, the result of expansion plans made years ago, is, of course, gratifying; but the contribution of a wide range of other manufactured goods is even more satisfactory because of the diversity it brings to the country’s export pattern.

Textile exports rose from $1.2 million to $4.2 million, rubber products from $0.4 million to $l.O million, chemicals from $2.3 million to $3.4 million, basic metals from $2.0 million to $3.2 million, electrical machinery from $1.3 million to $2.3 million, and other machinery from $2.0 million to $3.9 million. Many other items contributed to the increase, some making even more spectacular increases, expressed in percentages, though starting from smaller bases. The range of manufactured exports is as impressive as it is unexpected. And there is every indication that 1968-69 exports of these products will earn even more overseas funds—perhaps as much as $lOO million. The $64 million exports in the 12 months ended June represented a 59 per cent increase on the 1966-67 total: but the $22 million exports in the three months ended June showed a 99 per cent increase on the comparable figure for 1967. New Zealand’s devaluation of November, 1967. and the continuation of less buoyant trading conditions on the New Zealand market gave manufacturers a dual incentive to switch some of their production from the local to the overseas market In few instances could this diversion be accomplished overnight, or even within a few months. That exports were still rising in June suggests that the major effects on the balance of payments of this diversion are still to come. Manufactured exports comprised less than 6 per cent of all exports in the year ended June, 1967, but 8 p-r cent in the next 12 months, and 10 per cent in June alone.

The National Development Conference which will start its first plenary session in Wellington today, will have to examine critically the role of manufacturing in the New Zealand economy, and particularly in the export field, over the next decade. On its performance during the last year, manufacturing has earned a higher place in the planner’s scheme of things than seemed possible 12 months ago. But the very success of the manufacturers’ export drive contributes to the difficulty of planning for its future growth. For how long can the recent rate of increase be maintained•» When will the value of these exports level off? Of the major changes in the New Zealand economy in recent years, which ones have led to permanent improvement in the competitive position of New Zealand factories, and which are once-and-for-all gains? These are some of the questions the conference will need to answer, however tentatively, before it can suggest realistic targets for manufacturers to aim at, and work out the implications in terms of investment, employment, and output.