TREND OF BUSINESS

New Zealand Herald, Volume LXXI, Issue 21742, 6 March 1934, Page 10

TREND OF BUSINESS

IMPROVEMENT NOTED

DEMAND FOR BETTER GOODS UNCERTAINTY AS TO EXCHANGE "There is a general feeling that as conditions are improving so much in Britain and Australia it will be strange if they do not improve substantially in Now Zealand," said a leading Auckland importer yesterday. "At any i ate, there is littlo fear now that they will grow any worse." So far as his knowledge went, the volume of business in general had not increased- very noticeably since New Year, the importer continued. However, traders were beginning to expand their orders and to buy further ahead than they had done for many months past. For all of them exchange still cast a large shadow on the wall. They had the assurance of the Minister of Finance that the present rate would be maintained until the end of the export production year in June, but after that everything was uncertain.

Most of them were still "hedging" and were keeping stocks down to not much above the minimum. To those who dealt in foodstuffs, on which the nob profit was small, even a 5 per cent fall in exchange would be quite a serious matter. World Price Level Rising "Still, it is most encouraging that world prices generally are on the upgrade," , added the importer. "It is a good sign, and we feel safe on that side, anyhow." An indentor and importer agreed that there were signs of improvement. "It is not that people are buying much more," he said, "but they are buying a better class of goods. Whila they do not feel justified in launching out to any extent, they are going back to the quality of goods they were accustomed to buy when times were bettor.

"It seems to me that retailers should recognise this and educate their salespeople to meet the new demand. If a man goes into a shop prepared to pay 35s for a hat instead of 255, it is poor policy to show him a 25s hat in the first place. If they follow this new trend, retailers should have a good chance of increasing their turnover."

The same man deprecated nervousness over exchange. It was all due to importers' own unwisdom, he declared. When the rate was raised, most of them cleared their stocks at the old prices. If they had made a fixed resolve to sell at replacement value, they would have been able to put by a reserve to meet the inevitable loss when the rate was reduced. He was quite convinced that if importers had put their fears behind them New Zealand could have done ail extra £2,000,000 worth of import trade in tho past 12 months. Exchange Taken lor Granted

In Australia, to his own knowledge, no one was worrying about exchange rates, which woro no more noticed than the pressure of the atmosphere. This was, of course, due in part to the existence of large manufacturing industries such as New Zealand did not possess, but the main factor was the buoyant spirit of the people. There wore various grounds for confidence, most of all the general rise in prices. It was satisfactory to see that this affected our basic British industry, namely, steel. Tho rise covered nearly every important line of British goods. In some there had been a fall following the .initial rise, but not nearly down to the old level. The head of a firm doing business in many lines used by farmers stated that sales in February had been much better than in January, and also better than in February, 1933. He attributed this mainly to the rise in wool, which had dono much to help farmers who in other times had dopended mainly upon dairying.