ECONOMIC RECOVERY

Manawatu Standard, Volume LVI, Issue 108, 7 April 1936, Page 14

ECONOMIC RECOVERY

IMPROVEMENT IN BUSINESS. FAVOUIIABLE FACTOES. Commenting on favourable factors indicating a continuation of the improvement in internal business activity in the Dominion, the Government Statistician says a further increase in building activity is indicated by the statistics of building permits issued in the larger towns, while unemployment statistics show a further decrease. The number of registod unemployed males on February 15 was 32,354, the lowest figure on record for some years past. On February 16, 1935, the total was 35,071, so that a not sensational—recent improvement in the employment situation is indicated by the latest figures. Other statistical indications of the internal business situation —notably the figures of railway revenue, sales-tax collecof railway revenue, sales-tax collections, coastal shipping, and motor vehicle licenses—all point to an increase in internal business activity, the* momentum of the improvement increasing in recent months. * The progress of recovery in the Dominion has passed through two distinct stages, while the present situation is full of interest and future promise. The first stage of recovery was the proiiounced improvement in the 1933-34 export season from a definitely bad external trading situation, mainly through the agency of a phenomenal rise in wool prices. Internal business activity remained at slump levels. The second stage of recovery was the marked upswing late in 1934 and early in 1935 in internal business activity in the face of a deteriorating —though still basically sound—external trading situation. The excess of deposits over advances with the trading banks touched high levels in 1934, the ratio of advances to deposits being as low as 59.95 per cent, in August, 1934, a “lag” in the response of investment activity to the improved business situation thus being evident. Late in 1934 imports commenced a definite upward trend, which still com tinues. In the early months of 1935 the increase in imports, combined with the lowered realisations for exports (a consequence of the fall in wool prices) was reflected in an increase in the ratio of bank advances to deposits, advances rising while deposits fell somewhat. After May, 1935, a material diminution took place in the abnormally large overseas funds of New Zealand banking institutions. The third and present stage of recovery is more balanced that either of the two preceding stages. The salient leaturets of the present situation are the continuation of the improvement in internal business activity, and _ an improved external trading situation, with promise of future betterment A mild boom in building activity and a corresponding material increase in mortgage and land transfer business are also apparent. . , While recent banking statistics reveal ai) improved ration of advances to desposits as compared with the position in 1934, total deposits with the trading banks have now touched record levels, and overseas funds of New Zealand banks have increased —though not to the high levels of the early months of 1935.