INDUSTRIAL EXPANSION

Poverty Bay Herald, Volume LXVI, Issue 19882, 8 March 1939, Page 3

INDUSTRIAL EXPANSION

TRADE IN AUSTRALIA

POLITICAL STABILITY

Reasons for the maintenance in Australia of internal trade and secondary industry at a high level over the last 18 months, notwithstanding a sharp fall in export prices, are advanced by the National Bank of Australasia in its monthly summary for February. The bank says that perhaps the most important factor causing such a high level of trading and industrial activity has been the expansion in recent years of secondary industry, which has made Australia less dependent than formerly upon imported goods, and at the same time has given work to many people who, failing that expansion, might be unemployed. Severe though the fall in export prices between April, 1937, and December, 1938, has been, the bank says it has been a fairly steady decline, that the period “of high prices was not prolonged, being less than two years, and that the index for January, 1939, is higher than that of the year i 933 and is only 1 per cent less than the average for the years 1934 and 1935.

Substantial advantages accrued tc Australia as a result ol the high export prices of 193(1 and 1937, and their good efTccts have carried into the present period. They are not readily segregated, but among them are th • substantial investment by oversea interests in Australian industries, replacement of industrial plant with modern machinery, and a building up of stocks of imported raw materials and partly manufactured gcods needed in Australian factories, as well as o' those finished goods which are not made there. For these reasons th ' reaction to the fall m export prices is much less than would be expect..a to follow so pronounced a recession in the value of export eommo tues The increased expendituic on d fence and other public works lias Visvod a nart in stimulating business activity. Other important factors are ‘ cuv nniitical stability and free- “ T Sn P SS industrial disturb•inccs Their effect on business con- , . s peon augmented by varieH Ctions in eftc high rates o! taxatimi imoosed during the deprestaxnuoi . fbe low rates oi hiteir■ csrt* *curren t during the last six v e a r s. ——