Californian boom good for N.Z.

Press, 26 February 1977, Page 22

Californian boom good for N.Z.

By JOHN HUTCHISON San Francisco I A buoyant California ' economy should offer rich opportunity for New Zeai land exporters for the. i next ten years, according | to a “think tank” analysis here. ! Mr Robert Arnold, I director of the Center for I the Continuing Study of I the California Economy, . says that California’s 1 economic growth, already I ahead of the rest of the I United States will grow 25 I per cent faster than the i United States generally, : between now and 1985. i Pushing aside the state's I current economic troubles i — a cut in agricultural I production as the result of drought, a cut in aero- . space industry, and high : (but falling) unemployi ment — Mr Arnold flatly I forecasts rapid expansion." “For the past several

years, the economy has moved significantly ahead of the rest of the United States.” he says. "Despite current high unemploym ent, our detailed analyses show new jobs will be created here at rates well above the national average.” By 1985. he says, the. state will have 11.5 M jobs. (It now has about 8.6 M). Population, now 21.1 M, wil! reach 24.5 M, he says. Surveying the implications for New Zealand exporters, Mr Arnold says, "If any of them have been interpreting some of this state’s problems as reflecting a slowing down of the California economy, our analysis will show that they are wrong.” California now provides 11 per cent of the American market, and the share is growing. The state has ten per cent of the national population.

The best key to California's relative status in the commercial world is her total personal income, which in 1977 will rise to SI72M, an annual increase of.lo to 12 per cent. In a list of independent nations, that figure would make California the seventh or eighth strongest country, economically, on earth. Parallel to Mr Arnold’s survey for the short run, at least, is the 1977 "Economic Outlook." an annual publication of the Bank of America, which has its headquarters in San Francisco Predicting a year of "relatively robust economy” with business, personal income, and employment rising, the “Outlook” remarks: "As international trade increases, stimulated by world-wide recovery and by industrial expansion in developed countries, California has emerged as a

leading commercial force in the Asia-Pacific Basin — expected to be one of the world's major growth areas. In 1977, California's exports to the region will increase substantially. ■ "Nearly 450,000 Californians already are working in service, manufacturing, and agricultural jobs related to exports and imports, and the number is going to rise.” Mr Eric Thor, the Bank of America economist who prepared the "Outlook,’’ says that statistics now being analysed are expected to show that trade between New Zealand and California, in both imports and exports, rose significantly in 1976. New Zealand bought nearly SI9OM worth of California exports in 1975, making her the state’s fif-teenth-best customer, he says, and she is expected to rise by several places

— perhaps to tenth In exports to California New Zealand was not it the top 25 countries, bui is expected to step tntc that group when the 197 f figures are available, Mi Thor says. Australia wa< nineteenth in imports tc California in 1975. ‘‘Total Internationa! trade passing through (a ifornia in 1976 exceeded $2«,000M, a 12 to 15 per cent increase over 1975 ihe "Outlook” says. Another 13 to 15 per cent in crease is forecast for 1977. to bring the vear's total to $30.000M. ’ Asia Pactfi' Basin trade will comprise more than half the total, in both exports and imports. Japan is ( alifornta s most important trading partner, with Australia Korea, Mexico, and Taiwan also engaging in major trade with ihe state.