External Trade has Already Shown Some Improvement

Hawke's Bay Tribune, Volume XXI, Issue 303, 7 December 1931, Page 9

External Trade has Already Shown Some Improvement

MORE MIGHT BE EXPECTED DURING COMING SEASON.

"External trade has already shown some improvement. The excess of exports over imports is substantially greater than it was; the improvement is being reflected in the banking figures, and the bank rates of interest have been reduced. Further improvement might reasonably be expected during the coming export season,” states a Canterbury Chamber of Commerce bulletin dealing with the trend of business in New Zealand.

It points out that returns of overseas trade published for the latest quarter showed a continuance of the decline in both exports and imports. Exports were always small for the September quarter, and the decrease compared with last year was less than £2,000,000, while imports had contracted by £4,500,000. For the year ended September, 1931, exports and imports were both approximately £20,000,000 lower than they were two years ago, and both record the lowest levels reached since 1918. The year ended with September gave a good picture of the complete export seasons, end the following table showed how such years compared since 1925:—

The table brought out chiefly the very drastic decline in both exports and imports during the past two years, the decline in the excess of exports from £12,000,090 in 1928 to £1,250,000 in 1930, and the recovery of the favourable balance to more than £0,000,000 in 1931. A comparison of the volume and value of principal exports between the first nine months of the present year and the average of tho same periods in 1927-193’ showed that wool, with a very slight decrease in quantity sold, realised 52 per cent, less in total value. Lamb increased 16 per cent, in quantity and fell 7 per cent, in total value. The quantity of mutton fell slightly, tho total value fell 28 per cent. Butter exports increased nearly 18 per cent., while total value declined by 8 1-3 per cent.; the quality of cheese declined slightly and the total value fell by 28 per cent. Over the whole group the fall in total value was 27 per cent., but the five years 1927-31 include the low years 1930 and 1931, which pulled down the base of comparisons. The fall from the levels of 1928 and 1929, as shown by the preceding tables of total exports, was nearly 40 per cent. DECLINE IN IMPORTS. The decline in Imports has been widespread. Comparing the first nine months of 1930 and 1931, the following items had suffered heavily:—

The bulletin deals with the banking position, and comparisons aro also made of a number of significant scries, mainly for tho September quarters of the last three years, that supplemented bank debits as an indication of the volume of business:—

“Tho first four items of this series, covering a large volume of financial transactions, have all fallen more than 50 per cent, since 1929,’’ continues the report. “Building is specially hard hit, and total permits are little more than one-fourth what they were two years ago. The severe decline in totalisator investments suggests a heavy contraction in speculation. Tho fall in railway tonnage carried is severe, about 27 per cent., and probably reflects mainly tho general decline in business and the consequent economy in the use of transport. “Such indicators show as yet no improvement in internal trade conditions. In New Zealand it has been usual in the past for external trade to initiate movements toward both depression and prosperity in internal trade. Tho fall in export prices since 1929 has been tho main cause of the present depression. It brought a direct reduction in the national income of about 20 per cent, and indirectly the reduction of purchasing power may have been greater. I BRITISH PRICES. “If world prices expressed in gold remained the same, a depreciation of 20 per cent, in the British exchange rates on gold-using countries would automatically mean a rise of about 25 per cent, in the average prices of British imports and exports. So long as the New Zealand exchange in London remains unchanged, such increases in British prices, which are the direct result of exchange depreciation, would be passed on to New Zealand goods. The recent improvement in prices for some New Zealand exports are therefore largely the result of tho suspension of gold. “How far the upward movement will go depends on the extent of British exchange depreciation and on tho movement of world prices expressed in gold. There is little to encourage confidence in the world situation, and it would be unsafe to place any dependence on depreciation of British exchange. “It would be futile to rclv wholly on rising export prices to lift us out of depression. The remedy for depression lies in adjusting costs of production to levels at which the whole of our resources of production can be employed in turning out goods and services at prices which the community can afford to pay.”

OVERSEAS £ TRADE Millions. YEARLY. Year Excess Excess ended Imof exof imSept. ports. ports. ports. ports. 1925 55.69 50.62 5.07 1926 48.47 51.62 3.15 1927 45.84 46.17 .33 1928 56.25 44.14 12.11 1929 56.17 48.19 7.98 1930 47.65 45.79 1.26 1931 35.08 28.77 6.31

Per First 9 months of cent. 1930 1931 de(£1000) (£1000) cline. Motor vehicles .. 1888 456 76 Motor tyres .... 624 394 37 Motor spirit .... 1633 955 41 Apparel 1700 1014 43 Boots and shoes 772 354 54 Cotton goods .... 1503 894 40 Woollen goods .. 520 342 34 Carpets, etc Tobacco and 452 186 59 cigarettes Musical 879 526 40 instruments 237 103 57 Hardware, etc. .. 662 289 56 Electrical goods . 1271 794 38 Iron and steel ... 391 178 54 Timber 213 53 74

Sept. Quarter ...... 1929 1930 1931 £ £ £ Mortgages registered 10.77 10.24 3.79 Mortgages discharged S.33 6.63 2.86 Land transfers .... 8.48 7.01 4.01 Building permits .. 2.71 1.56 .77 Totalisator invest' ments (Aug. and Sept.) .71 .56 .34 Exports 7.88 7.35 5.48 Imports 13.82 10.78 6.18 Tons. Tons. Tons Railway freights 165-167 days) .. 3.61 3.36 2.64