BUSINESS TRENDS IN FEBRUARY

Southland Times, Issue 23795, 18 April 1939, Page 5

BUSINESS TRENDS IN FEBRUARY

HIGH LEVEL OF BANK DEBITS EFFECT OF INCOME TAX PAYMENTS Bank debits to individual customers’ accounts with the trading accounts reached the highest level for nearly two years, according to the latest issue of The Monthly Abstract of Statistics. Statistical indicators of the state of business in February in general show little variation from the trend of recent months, states the Abstract. Financial statistics, as usual, are somewhat affected by the transfer of funds consequent upon the annual payment of income-tax, which contributes to the sharp rise in the volume of bank debits when compared with the previous month. Active bank-note circulation continues at a high level, only slight recessions from the peak figures of December being recorded. Goods traffic carried by the railways during the four weeks ended on February 4 was particularly heavy, being 9.7 per cent, above the figure for the corresponding period of the previous year, while the net operating revenue for the period (£724,511) is higher than in any previous four-weekly period in the history of the New Zealand Railways. The total value of exports during February was only slightly below that of January. Sharp decreases were recorded in butter and cheese exports, but the figures for lamb were subsequently above those for the previous month. Imports rose slightly in value when compared with January, and were also above the total for February 1938. It would appear that the Import Control Regulations have not been in force a sufficient length of time to have had any appreciable effect on the figures for February. Judging by reports received from the district officers of the Department of Agriculture, rain is urgently needed to ensure adequate supplies of winter feed for stock. Parched conditions are reported from many parts of the Dominion, and while stock, particularly sheep, are in fair condition, milk-pro-duction has fallen off.

BANKING DEBITS j The average weekly value of bank debits to individual customers’ accounts with the trading banks in February (£21,853,234) is the highest for an individual month since April 1937. It represents an increase of £5,995,101 above the average for January and one of £911,037 above that for February 1938. It should be noted that February is normally one of the peak months, in bank debits, for, in addition to being well into the exporting season, the figures are affected by the transfer of funds consequent upon the payment of income-tax, which falls due in this month. With the exception of February, March and April of 1937, the average for February 1939 is the highest recorded since these statistics first became available (in April 1928). The particularly high figures recorded for the period of 1937 referred to, were mainly the result of the exceptionally high wool-prices ruling at that time. Although the active note-circulation is on a substantially higher level, the decrease from the peak level of December has been approximately the same as that recorded between December 1937, and February 1938. The average for February 1939, is £10,766,315, a decrease of £674,074 below the December 1938 figure, while the average for February 1938 was £9,333,173, which in turn was £750,808 less than the December 1937 average.

The value of outstanding advances by the trading banks shows the normal seasonal decline. The average amount in February 1939, was £55,263,094, a decrease of £1,369,107 when compared with January, while the February 1938 figure (£52,746,134) was £727,169 below that for January of that year. The average amount of deposits on current account during February (£34,483,315) has bpen exceeded only once (April 1937, £35,249,771) since monthly statistics of bank deposits became available in April 1928. The comparable figure for January was £32,699,089, and that for February 1938, £33,576,855. The declining tendency of fixed deposits over a considerable period would appear to have slackened somewhat, the average for January being only £2953 below that for December 1938, while the average amount for February (£31,193,492) is actually £13,974 above the January average. The figure for February 1938 was £32,962,899.

The ratio of free to fixed deposits is now 110.6 per cent, as compared with 101.9 per cent, a year ago. Unexercised overdraft authorities at the end of February amounted to £23,036,586, compared with £22,215,547 in January and £24,396,286 in February 1938.

Net overseas funds of New Zealand banking institutions (on account of New Zealand business) showed an improvement during the months of January and February, the net amount held on February 27 being £9,059,193 (N.Z. currency) as against £6,806,733 on December 26, 1938. The corresponding figure on February 28, 1938, was £25,517,818. The funds of the trading banks increased from £3,147,366 at January 30 to £4,257,437 on February 27, while the Reserve Bank’s net holdings of sterling exchange rose from £4,109,338 to £4,801,756 (N.Z. currency) during the month. Deposits in the Post Office Savings Bank during February amounted to £2,215,367 and withdrawals to £2,669,087, leaving an excess of withdrawals amounting to £453,720. Comparable figures for February 1938 were: Deposits, £2,554,072; withdrawals, £2,375,856; excess of deposits, £178,216.