THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, MARCH 16, 1922. BRITISH TRADE OUTLOOK.

New Zealand Herald, Volume LIX, Issue 18041, 16 March 1922, Page 4

THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, MARCH 16, 1922. BRITISH TRADE OUTLOOK.

♦ The statistics of British trade for February, which were published yesterday, show that the improvement which characterised the second half of 1921 is being more than maintained. It must be confessed that an attempt to express trade in values may easily be misleading. The values of both imports and exports are greatly in advance of those of 1914, but that must not be permitted to obscure the vital fact that the volume of the export trade is substantially below the pre-war standard. On the other hand, though the volume of trade is still smaller than during the post-war boom the decrease is not so great as a comparison of values would imply, because a lower price-level has been established. Fluctuations of trade from month to month must be interpreted with great caution, and more reliable conclusions can be drawn from the records of a : longer period. The pulse of British I trade can at this time best be taken i by examining the records for 1921. i Compared with the figures for 1920 ' the value of the year's turnover was i little more than half. Imports • amounted in value to kl ,086,000,000, £ against in the pre- ' vious twelve months; exports to .

£703,000,000, against £1,334,000,000 in 1920, and re-exports to £107,000,000, against £222,000,000 in 1920. These figures represent a very

large diminution in the value o! trade and a smaller decrease in volume. The apparent adverse balance for the year was £276,000,000, compared with £375,000,000 in 1920. It is not easy at the present time to estimate the invisible exports. A calculation made by the Board of Trade a year ago gave a total of £600,000,000, made up as follows:— Income from foreign investments, £120,000,000; net shipping earnings, £440,000,000; banking, insurance and other services, £40,000,000. Since these figures were published the earnings of shipping in particular have been severely reduced. It is probably approximately acourate to nut the profits on shipping at £70,000,000, and the earnings on foreign investments, banking and insurance at £100,000,000, a total of £170,000,000, leaving an adverse balance for the year of about £100,000,000.

It is instructive to trace the year's trading by volume. The tonnage of imports was, during the first half of 1920, not much below the figures for 1913. In the second half of 1920 the imports fell away, and in 1921 remained about the level reached at the end of 1920. The chief decrease was in raw materials, due to the anticipation of lower prices and the smaller requirements of manufac-

turero. The export trade was fairly steady during 1920 at about twothirds of the volume of 1913. The coal strike played havoc with the export trade from March to June, 1921, but there was a gradual recovery during the second half of the ; year. The Board of Trade has prepared a very instructive table showing the aggregate trade of the last three years compared with that of the year preceding the war, on the basis of 1913 values throughout:— Imports. Ko-Exnorts. Exports. I Trade of Thcucand £ Thousand £ Thousand £ I 1013 768,735 109.567 525,254 | 1919 670,786 85.726 288.105 1920 679,274 08.909 872,476 j 1921 570,912 85,612 261,647 | Even more interesting is a table | showing the volume of trade during i the past three years as a percentage I of that of 1913: — 1921. 1920. 1919. Imports .. .. 74.3 88.4 88.4 Reexports ~ 78.1 90.3 78.2 Exports . . . . 49.8 70.9 64.9 | This discloses the highly significant i fact that for every ton of United j Kingdom manufactures sent abroad in 1913 only half-a-ton was exported in 1921. Even taking the last quarter separately, to show the effect of the coal trade recovery, a decline of 39 per cent, from tho 1913 figures is recorded.

It cannot be pretended that the conditipn of British trade, judged either by the balance for the year or by the volume of exports, is satisfactory. Yet there arei certain hopeful Bymptoms. Trade is improving and will shortly receive a seasonal stimulus. The costs of production are gradually coming down, thus giving the British manufacturer an opportunity of meeting the low purchasing power of his European customers. The aggregate net reductions in wages in the United Kingdom last year were at the rate of £5,560,000 a week, affecting nearly 7,000,000 workers. Most of the reductions took place automatically uuder sliding-scale arrangements basod on the cost of living. It is gratifying to find that though most of these wage cuts took place in the second half of the year, the period was remarkably free from strikes. The first half of 1921, owing to the prolonged coal strike and interruption of work in the cotton and Shipbuilding industries, established an evil record, but from the beginning of July industrial strife fell suddenly from a maximum to very small proportions and so continued during the remainder of the year. Another encouraging sign is the recovery in the value of the pound sterling in relation to the dollar. This means a cheapening of raw cotton and other materials which will more than offset any ill-effects the appreciation of the pound may have on the sale of British goods in North America. _ It is interesting to note that the improvement of the American exchange is greater than the actual trade figures for 1921 appear to warrant, suggesting that Americans take a favourable view of Britain's industrial position. Psychology has more to do with business than usually appears on the surface, and perhaps the most significant feature of the situation is that British manufacturers themselves are almost prepared to be optimistic for the first time for many months.