IMPROVING TRADE

Southland Times, Issue 22214, 5 January 1934, Page 9

IMPROVING TRADE

BUSINESS STATISTICS. EXPORT PRICES HIGHER. The revival in business activity in Great Britain during recent months has coincided with the seasonal slackening in export trade normal in New Zealand in the winter and spring months (states the December edition of the Monthly Abstract of Statistics). Consequently statistical indicators of the state of business in the Dominion have not as yet responded fully to the impetus of brighter conditions overseas. Nevertheless, there are definite indications that economic conditions in New Zealand are improving; and, now that the busy season is approaching, this upward trend should become more apparent during the next few months. _ Business activity in the Dominion is affected to a greater extent by external trading conditions than in most other countries; and, consequently, fluctuations in export prices are a specially significant guide to the trend of business. In this connection it is pleasing to note that, during each of the last six months, the official index number of export prices has moved upwards. The increase between May—the low point during 1933 —and November has been as much as 26.4 per cent.; and, moreover, the upward movement has been maintained during the past month despite a recession in prices of two important expert commodities —butterand cheese. The Wool Sales. Prices at the opening wool sales of the season show a decided advance when compared with prices at the end of last season. Fine wools of average quality have realized between 15d and 18d per pound at the sales held up to the present; while the prices realized for average quality crossbred (44-46’s) have varied between 71d and 9Jd per pound. At the March and April sales this type of wool realized, bn the average, between 3£d and 4Jd. Indications point to a considerably decreased world production of wool this season, while activity in the woollen and worsted trades has strengthened steadily in recent months. The influence of wool prices as a factor in industrial revival can be realized when it is remembered that each increase of Id a pound in the price realized for this commodity means an increase of over £1,000,000 in the return from the season’s wool production in the Dominion. Moreover, the returns from other farm products should increase as a consequence of the rise in wool values. The fall in wool prices in 1930 caused a partial change-over from wool production to dairying in countries producing pastoral produce for export. The consequential increase in dairy production and the diminished buying power of consumers were major factors contributing to the collapse of the butter and cheese markets, while the killing-off of sheep and lambs owing to unremunerative prices for wool contributed to the glut in the meat markets of the world. The position has now been reversed; for, with the revival of wool prices, there will be a tendency on the part of sheep farmers to restrict killings of sheep and lambs; while an increase in sheep farming at the expense of dairying would be the natural consequence of a continued rise in wool values. Trade Revival.

Signs of a revival in internal trading and financial conditions are evident in statistics for recent months. Sales tax receipts have increased in each of the last four months, indicating an increased volume of wholesale trading. The volume of railway traffic is increasing, while an excess of £27,996 in operating revenue over working expenditure is revealed in returns covering the period July-November. There is normally an excess of expenditure during this comparatively slack period of the year. Building activity shows signs of a revival from the. abnormally low levels experienced during the past two years; while, probably partly . as a consequence of the increase in building activities, the values of mortgage registrations and land transfers show a considerable increase in November as compared with the preceding month. The official index number of share prices, after a slight check in October has resumed the steady upward trend which has been a characteristic of this series during the past twelve months. Banking returns still reveal a low ratio of free to fixed deposits. Some improvement is shown, however, in the ■latest returns. Import Trade. The volume of import trade does not as yet show signs of improvement. Owing to the remoteness of New Zealand from the world’s markets, there is of necessity a considerable lag in the adjustment of the import trade to general economic conditons, imports during any particular month being the result of orders some months in advance of the date of import. This delay in the adjustment of the import trade to export values was experienced on a falling market in 1930; and, conversely, a recovery in import tiade will naturally lag some months behind the revival in the value of exports. Exports during the month of November were valued at £2,968,901 in New Zealand currency, equivalent to £2,375,000 on a sterling basis. . The recorded value of merchandise imported during the same month was £1,763,906. equivalent to £1,706,000 in sterling and £2132,000 on a New Zealand currency basis. The excess of exports was £837,000 on a New Zealand currency basis and £669,000 on a sterling basis During the expired eleven months of the calendar year the value of produce exported exceeded that of imports of merchandise by £13,521,000 on a New Zealand currency basis, or by £10,817,000 in sterling. Banking. The average weekly volume of bank debits to individual accounts was slightly lower in November than in October. The amount (£10.485,810) is, however, greater than the corresponding amount in November of the two previous years, while the fall of 1.8 pel cent, as compared with October is caused by the heavy total reached during the first week in October, a normal occurrence, owing to the meeting of half-yearly payments due at the end of September. The November, 1933, figures indicate an improvement in the volume of internal monetary transactions when comparison as made with figures for the corresponding period of the two immediately preceding years. Increases of £315,365 and £86,868 respectively are shown as compared with the November period of 1931 and 1932. The November, 1930, average is £2,630,893 in excess of the most recent figure; but it must be remembered that this decrease is partly accounted, for by the lower level of prices ruling now as compared with 1930, and is thus not entirely due to a decreased volume of business transactions. Exports during the month of November were valued at £2,968,901 in New Zealand currency, an advance of 13.9 per cent, on the corresponding figure for November of last year. The favourable winter and spring weather conditions are reflected in an earlier beginning to the export season, exports of lamb, butter and cheese being substantially in advance of the totals for November, 1932. Imports of merchandise during November were valued at £1,763,906, this recorded value being equivalent to £1,706,000 in sterling and £2,132,000 in New Zealand currency. The sterling value of imports was £286,000 below the total for November, 1932. Exports (excluding specie) during the eleven months ended November 30 were valued at £36,890,517 in New Zealand currency, equivalent to

£29,500,000 on a sterling basis. This represents a considerable increase on the corresponding totals in New Zealand currency for 1931 and 1932, and a slight increase on a sterling basis. Imports of merchandise during the expired portion of the calendar year were valued at £23,370,000 in New Zealand currency and £18,700,000 on a sterling basis, an increase of £900,000 on a New Zealand currency basis as compared with the corresponding period of 1932, but a decrease of £1,720,000 in sterling value.