THE BUSINESS YEAR

Evening Post, Volume CXXV, Issue 69, 23 March 1938, Page 14

THE BUSINESS YEAR

A GOOD BEGINNING

RECORD SALES TAX

"Evening Post," March 23

The year 1938 began with excellent ■ indications of prosperity, as the Government Statistician sees them. These indications for January compare favourably with corresponding figures for January of previous years. The volume of cheque transactions as reflected in the value of debits to individual customers' accounts with the trading banks was particularly high for a January month, while the active note-cir-culation, despite a seasonal'fall from the record level in December, was also very high—in feet, the. second highest monthly average on record. January last proved to be exceptionally busy in respect of export trade, the value of exports during that month (£7,492,875) being £452,824 higher than the value of exports in January, 1937 despite the recession in wool values. Exports of butter and frozen lamb were particularly high both in quantity and in aggregate value in January, counteracting the effect on the value of exports of a considerably lowered quantity and value of wool ex- j ported in that month. ; A SHORT WHEAT CROP. j The wheat crop in 1938, however, j will be substantially below annual ■ requirements, the estimated yield being 5 730,000 bushels as compared with- an actual yield of 7,169,000 bushels m 1936-37. The decrease shown is not due to a lowered anticipated average yield per acre, but to a sharp decrease in the 'area sown under wheat. The area sown in wheat for threshing in the current season was 178,700 acres as compared with 221,800 acres in 1936----37 The average weekly value of bank debits to individual customers' 'accounts during January was £16,707,968, a decrease of 16.6 per cent, below the average for December, 1937. This fail is however, a purely seasonal one, bank debits in January being normally very considerably below the December figure. Bank debits in January, 1938, were 0.7 per cent, higher than in January, 1937, and 23.4 per cent, above the figure for that month of 1936. BANK DEPOSITS INCREASE. The average amount on deposit with | the trading banks during January was £66193,039, an increase of £1,297,718 above the average in December. Deposits on current account increased from - £30,457,077 in December to £32123,970 in January—the. increase being in keeping with normal seasonal trends. Deposits on current account will increase during the next few months with the flow of funds from sales of wool and other farm produce. A seasonal fall in advances is usually shown at this time of the year, the average amount of outstanding advances being £53,473,303 in January, as compared with £54,216,328 in December, the ratio of advances to deposits falling from 83.54 per cent, to 80.78 per cent. ... The note-circulation was surprisingly buoyant for January, the figure, despite the fall, being the second highest on record. Normally, January is one of the lowest months—often actually the lowest month—of the year in respect of note-circulation. The statistics of note-circulation and of banlc debits would suggest that the postChristmas seasonal falling-off in buying was somewhat less pronounced this year than is usual. OVERSEAS TRADE. The declared value of exports during January was £7,492,875, as compared with £4,416,937 in December, 1937, an increase of £3,075,938. After giving details of wool, dairy produce, ■ and meat exports, the Government Statistician goes on to show'that imports have increased this January by £918 941 over those of January, 19.57. The value of building activity represented by building permits issued in the larger towns in January was £659 990 as compared with £643,771 in December, and £378,427 in January oi 1937. The number of permits issued in January for the erection of new buildings was 437 as compared with 323 m December and 224 in January, 1937. These figures include Government new work. SALES TAX AND PRICES. Sales tax collections in January totalled £317,518, a record figure for any single month since this tax came into operation (1933). Sales tax returns in January are normally high, reflecting the payment of this tax on a large proportion of the goods bought by retailers for the Christmas trade. The January, 1938, figure is not only a re- . cord but it also exceeds considerably that "for any other January month, being 7.9 per cent, higher than the January, 1937, figure—the previous record for this month. The retail prices index (base: 1926-30 equals 1000) for the three food groups, at 9ff2 is 20 points below that for theprevioufmonth (December, 1937) This movement, however, is confined almost entirely to the groceries group which has fallen 58 points (from .1046 to 988), due to seasonal decreases in the pneeb of potatoes and onions. Movements in-the-dairy produce and meat groups are negligible: When the January indexes for the food and fuel andigh : Groups are combined with the August rent index and the November indexes for the remaining groups, an all-groups index of 942 is obtained, which is 7 points below that for the previous month, and 50.0 per cent, above the 1914 level.