BUSINESS CONDITIONS

Otago Daily Times, Issue 22955, 10 August 1936, Page 7

BUSINESS CONDITIONS

BUOYANCY MAINTAINED EXTERNAL TRADE MOVEMENTS Statistics illustrating the state of business in June indicate a continuation of the buoyant conditions which have been manifest for some time past. The value of exports (states the Abstract of Statistics) shows the expected seasonal decline from the May total, with consequential decreases in bank deposits, bank debits to individual customers’ accounts, and the overseas funds of banks on account of New Zealand business. The normal seasonal slackening in industry in general, consequent on the winter falling-off in farm production, has been partially counteracted by the exceptional buoyancy of building activity and an increase in public works construction: with resultant increased activity in trades allied to building—e.g., sawmilling. Furthermore, while there are no current official data directly indicating movements in manufacturing, there is ample evidence pointing to a continuation of increased activity in these industries. In consequence of the considerations outlined above, the active circulation of banknotes shows an increase in June, contrary to the usual seasonal tendency, the average amount in circulation during the month being very little below the record level reached in April. The value of imports and the amount of sales tax collected also show increases over the May figures. IMPROVED SPENDING POWER A review of Dominion statistics under various headings affords an indication of the current state of business activity in comparison with the position a year ago. The statistics point to a material improvement in economic conditions generally; outstanding gains being shown by trade statistics for the year ended on June 30—a particularly significant period—and in building permit statistics,, notably in respect of house-building. Activity in all branches of transport is considerably greater than was the case a year ago. The substantial increases recorded in bank debits, net note circulation and totallsator investments all point to a material improvement in spending power, EXTERNAL TRADE

In terms of New Zealand currency, and excluding specie, exports during the six months ended on June 30, 1936, were valued at £34,230.823, an increase of as much as 26.3 per cent, over the total during the same months of 1935 (£27,109,241). The excess of commodity exports over commodity imports in New Zealand currency was £14,370,371 during the sixmonthly period, as compared with £10,391,431 during the six months of 1935. Prices received for New Zealand produce in overseas markets are substantially higher than was the case 12 months ago, a comparison of the declared values of the principal export products in June, 1936, showing the following increases over the corresponding prices in June, 1935:

Increase per cent. Butter 37.1 Cheese 33,1 Frozen beef 9.3 Frozen mutton .. .. 17.9 Frozen lamb 6.5 Wool (greasy) 20.4 The increase in wool prices is of particular interest, while the low state of stocks in the principal consuming countries augurs well for the future prospects of prices of New Zealand wools. The stocks of wool (sold and unsold) held in New Zealand on June 30 totalled 43,700,0001 b in the grease, as compared with 87,300,0001 bon June 30 1935. The value of imports during the year ended on June 30,1936, was £39,459,909, as compared with £34,301,328 during the previous June year. The marked increase in imports during last year resulted in a substantial decrease in overseas funds during the slack period of the exporting season, the net overseas funds of banks on account of New Zealand business falling from £(N.Z.) 46,023,854 on June 24, 1935, to £9(N.Z.)33,976,157 on October 28, 1935. (A small portion of the decrease was caused by the repayment of part of an overseas loan.) As a consequence of the buoyancy in exports during the export season just ending, overseas funds have increased substantially since October last, despite a continued relatively high level of imports, the total on June 29 being. £ (N.Z.)43.956,445 —an increase of £ (N.Z.)9,980,288 over the October figure; but £ (N.Z.)2,067,409 below the total on June 24, 1935. The statistics of external trade for the last six months indicate a welcome degree of balance in the direction of movement in exports and imports, both exports and imports being substantially higher in value than has been the case during these months for several years past.