TREND OF BUSINESS IN NEW ZEALAND

Northern Advocate, 14 December 1937, Page 6

TREND OF BUSINESS IN NEW ZEALAND

The December bulletin issued by the Canterbury Chamber of Commerce, and prepared in consultation with the Faculty of Economics of Canterbury University College, gives valuable information relative to the fluctu-

ations of New Zealand’s exports and imports during the past ten years. The figures given below set out total values for exports and imports in significant years, reduce these values to indexes, compare them with’ the price indexes and deduce from them the index numbers of volume given in the last column. Volume of Overseas Trade. 1926-37. Base 1926 - 100. EXPORTS

As the compilers of the bulletin point out, these figures show a remarkable increase in the volume of exports and a wide variation in the volume of imports. Export prices fell more heavily than import prices during the depression and have since risen more. The volume’of exports has increased continuously throughout the last ten years. The increase was particularly great during the period of the heavy price fall from 1929 to 1922. Since then the increase has continued more steadily. Tim volume of exports, as shown by these figures, is now fit) per cent, greater than in 192(5. During the depression years, as the purchasing power of exports fell, the volume of imports also fell heavily. For the year 1932. although exports had increased in volume!

by 3G per cent, since 1926, the volume of imports had fallen by 33 per cent. In return for a given quantity of exports New Zealand was then receiving less than half as much imports as in 1926. This fall in the exchange value of exports was an important cause of the reduction in New Zealand’s real income. Since 1932,

as the rise in values has increased the purchasing power of exports, the volume of imports has increased, and up to June. 1937. the increase recorded is 95 per cent. In comparison with 1926 the increase in the volume of exports is considerably greater than in the volume of imports, despite the fact that, relative to the base year, export prices are now higher than import prices. The explanation, it is remarked, is that in 1926 New Zealand was borrowing heavily from abroad and the loan money raised overseas paid for a larger relative amount of imports. Since overseas borrowing has ceased, a, greater surplus of exports is necessary to meet obligations abroad. Unless borrowing abroad is resumed, the excess of exports over imports required to meet payments abroad will be greater in the future than in the past.

Value Value Price Vol. Year £NZm. Index Index Index 1926 45.27 100 100 100 1929 54.93 121.5 105 116 1932 35.61 78.7 58 136 1935 46.54 103 72 143 1936 .. 56.75 125 81.5 153 1936-37 (to June) 64.42 142.4 91 156 IMPORTS Value Value Price Vol. Year £NZm. Index Index Index 1926 .. 49.81 100 100 100 1929 48.73 98 86 114 1932 .. 24.65 49.5 75 66 1935 .. 36.32 73 75 97.5 1936 44.13 88.7 75 118 1936-37 (to Juno) 50.08 • 100.5 78 129