ECONOMIC PROGRESS

Evening Post, Volume CXXIII, Issue 111, 12 May 1937, Page 12

ECONOMIC PROGRESS

AN EVENTFUL YEAR

OFFICIAL REVIEW

Economic conditions in.- the Dominion at the beginning of the financial year just closed were considerably better than for some years previously (remarks the Government Statistician1 in his review of business in the Dominion), but complete recovery from.the depression period was not in sight. Conditions have altered materially during the past 12 months, further recovery in internal business activity being accompanied by a material change for the better in the external trading situation. The Government Statistician refers to the first signs of recovery becoming evident in the 1933-34 financial year in the direction of a sharp improvement in a bad external trading situation. During 1934-35 internal business, activity quickened, but exports fell owing to lower wool prices and an exceptionally dry production season. During 1935-36 exports recovered, imports continued to increase, and internal business activity continued to expand. Factory production in that year recovered substantially—employment in factories touching a record level. ' PRICES OF EXPORTS INCREASE. "Overseas prices of New Zealand products have increased substantially, particularly in respect of wool prices, the rise in which has been spectacular. As a factor partially offsetting the enhanced overseas prices of New Zealand goods the re-armament programme in Great Britain and other countries has resulted in recent sharp increases in prices of metals and other basic materials. ■ ~ "During the latter months of the financial year the value of cheque transactions, active circulation _•»• ot bank-notes, and deposits in savings banks have touched new record levels. The value of exports during the.financial year also 'exceeded the previous highest March-year -. total, while imports (though not a record) -were'the highest for several years past. Indications point, to the level of employment in factories, being materially higher than,the record level shown by %he statistics for 1935-36. . CHANGED CIRCUMSTANCES. "If the above factors were the only ones to be considered they woulS point to a, complete .recovery to normal conditions in, industry and trade, but circumstances have^changea so considerably in the eight years •which have elapsed since the last "normal" year that comparisons with, the prfrdepression years lose, much of their point. The achievement of record levels in important statistical series indicated above would be a necessary corollary of complete recovery, since the population, though increasing, at a reduced rate, is substantially higher than eight years ago. On the other hand changed circumstances must account at least partially for the relatively slow response of certain statistical business indicators to enhanced prosperity." , BWI.DING AND EMPLOYMENT. Building activity, though expanding, is shown as still materially below the levels reached in the years immediately prior to 1930; but a considerable improvement should soon become apparent, as construction.; work under the Government's housing programme has recently commenced. Land transfers, though increasing, are still far below the levels of a decade ago—to a large extent a natural complement1-of the lower level of building activity; and, in respect pf country properties, at least partially as a result of mortgage-relief legislation. The above * factors will also account to some extent for the relatively low relationship of bank advances to deposits. . ■ "Evidence points to a marked increase in employment during the past financial year;, in fact, in many trades si definite shortage-of labour is apparent. Nevertheless, the volume of recorded unemployment, though decreasing'rapidly, is still considerable. There were 34,249 males unemployed on April 10—a decrease 0f.1b.570 from the level a year previously.. While the rapid improvement -in.-this figure suggests that the irreducible minimum rnfy be considerably below the latest figure, the effects of the prolonged cessation of work during the depression years may be evident for years to come in a higher level of unemployment than current economic circumstances ■would warrant. ■ ■ > "It is most difficult to rcabsorb men into industry—particularly in the older age groups—after a long period of enforced idleness." EXTERNAL TRADE. ' The values of exports and of imports for the year ended March 31, 1937, reveal phenomenal increases &s compared with the totals for the previous year Exports of merchandise amounted to £60,234,511, an increase, of £10,558,519, as compared with the total tor last year (£49,675,992). Imports inSeased^in value from £37,439,944 to f47 621104 for the period just ended. Specie exports, £11,045, are not included in the above figures. ■ . The excess of exports over imports for the 12 months ended March 31 last was £12,613,407, an increase of 3.1 per weekly value of bank debits to individual customers' accounts with the trading banks in March was £23,066,487 (excluding Government debits), the highest mnnthlv average since these statistics we?e toitiald tin April, 1928). March Jis normally the peak month in respect of the volume of cheque transactionsbeing at the height of seasonal activity in the primary-producing industries. The fact that a record level, has been reached is a significant indication ■of the extent of the recovery in business activity, the latest figure, being more than double that recorded in -March, 1932-the low-point in respect °fpriSl h experts for the year ended March 31 in quantity and value were as follows: — £(N.Z.). Butter; cwf ...... 2.9411.702 IM§U43 SKW::::::::: 3 M# CaWe Mdc^No. .».. ; 'm.Bii «B^ea BabbitsWns, No. ... ",157,1U0 ISS'SnS Siss^/So.":: i: $ -■» Wool! bales' ....... 8«,»2S 15,757,200 The outstanding item in the'imports is motor vehicles. For 1935-36 the imports were,of the value in New Zealand currency of £3,653,984; for the year ended March 31 last the value was increased by £1,379,792, being shown as £5,033,776. . Other large imports for 1936-37 were: Apparel, £1,521,274; cotton piece'goods, £1,993,589; silks, £1,160,949; woollens, £1,016,796; motor spirit, £1,729,445; electrical goods, £1,986,189. Imports of merchandise for the. year were 27.2 per cent, over those of 1935----38.