BUSIER FACTORIES

Taranaki Daily News, 9 December 1931, Page 7

BUSIER FACTORIES

FEATURES OF PAST YEAR. COMPETITIVE PRICE-CUTTING. It is difficult to form an opinion yet whether the increased demand for New Zealand-made products in the past month or two is the result of propaganda or is duo to restricted importations. One certainty, however, is that the factories are busier than at any time for z more than twelve months, and there is a good deal of work in hand to begin after the holidays. Although it cannot be claimed that the trade is on a more profitable basis, this revival of activity is to be welcomed, said an Auckland representative of a large firm, because it is a much more hopeful position than to be looking for occasional orders. In December last, after the opening wool sale, business suddenly fell away, he continued; and the period of slackness that followed went right through to a bad winter’s trading. This applied as much to the wholesaler as to the manufacturer. One reason for the difficult year was the low price of raw materials. The spending power of the community had been reduced, and this had driven firms into competitive price-cutting. There had been evidence on every hand of an attempt to keep up output and to find work for machinery and staffs. It had been far more a year of that nature than one in which good business on a satisfactory basis had been booked. Whenever materials were low in price and the prices of manufactured goods had to be reduced, overhead charges became a burden, and unless output could be appreciably increased the expenses became a weight on industry, f Continuing, this informant said: “It has been a harder year than 1930, because the public has not had the buying .power, and it has ■ been more difficult to secure big business from the manufacturing point of view. The trade has been buying more from hand to mouth, and the retailers have been working off their stocks, but it is reasonable to hope now that the local manufacturers will enter upon a period, at any rate, of better trading conditions. “The high exchange rates have checked importations, and that is going to, play more and more into the hands of local industry. There are signs that shortages are now occurring. “From time to time we hear people talking about the need for rationalising industry in this country. I do not think any rationalising would lower prices more, to the advantage of the consumers, than the existing open competition. Conditions have been such that I do not consider any rationalisation would have benefited the public more than the competitive cutting of prices. For the purpose of keeping hands going, certain articles have really got below cost, and in some directions rationalisation might even mean an increase in prices." \ ■