PROSPECTS IN BRITAIN

Taranaki Daily News, 13 February 1931, Page 12

PROSPECTS IN BRITAIN

FIRST SIGNS OF RECOVERY. POINTS TO BE WATCHED. Indication of the signs that will forecast the beginning of eventual recovery from the depression in trade was given by ( the Westminster Bank Review recently. “The time may now be at hand when it is necessary to urge upon all engaged in trade and industry the advisability of making arrangements in order to profit by a slow but steady return to more normal conditions,” it said. “There is an adage, which is as true in the business sphere as in any other, that when things are at their worst they begin to mend.”

A stationary or slowly declining total of unemployment in Britain in January and February would suggest that an improvement in underlying conditions was at least holding its own against an adverse seasonal trend. The real test would then come in the spring, when, if hopes of recovery were well founded, the reduction in unemployment would become much more rapid. The next chronological sigh of the impending revival would be a tendency for many companies to report an increase in orders —not in a spurt, but in slow and consistent fashion over a number of weeks. The inference would then be that the merchanting community, whose business it is to foresee changes in public demand, was convinced that, in some weeks’ or months’ time, such demand would be on a rising scale. If such outward and visible signs of the beginnings of trade recovery are observed during 1931, it must not be expected that this -recovery will be felt in all industries precisely to the same extent and at the same time. The earliest beneficiaries from trade revival are industries producing articles which are consumed by large numbers of people, or the “power” used by these industries. Thus producers of foodstuffs and household necessities, caterers, retail traders, and, more indirectly, electrical power and gas companies, will be among the first to feel the effects of the new and favourable trade wind. Trades like iron and steel, engineering, and shipbuilding, which produce the “capital’ goods for industry, will be among the last to benefit.

The volume of imports of raw materials into Britain, as shown by the monthly figures of the Board of Trade, w’ill afford much earlier evidence of pending industrial recovery than the exports of British manufactured, goods, whose revival is almost invariably one of the last movements in a revival.

“Finally, as the movement becomes comparatively well established, issues of new capital will tend to be made less and less by municipal corporations and other public authorities for large schemes of corporate expenditure in which cheap money is a considerable factor, and more and more by limited companies in the form of equity shares. The time-table of improving trade is contingent upon the maintenance of internal peace in industry. Broadly speaking,' the maintenance of good relations between representatives of industry and of labour, based on a spirit of mutual understanding, is essential if the process of convalescence in British trade is to be as speedy as all would desire. In the absence of such a spirit of co-operation among all the partners in industry, the advent of better times will be postponed, and the country may find itself at an overwhelming disadvantage when prosperity has returned to other lands.