SIGNS OF IMPROVEMENT

Taranaki Daily News, 19 April 1934, Page 16

SIGNS OF IMPROVEMENT

INCREASE IN BANK DEPOSITS. BUSINESS REACTION TO STIMULUS. Business conditions generally show signs of reaction to the stimulus of improving returns from export, trade, reports the Goveminent Statistician. Building activity has undoubtedly improved materially, during recent months, aided by the Unemployment Board’s subsidy scheme. Railway finances continue to show improvement; and the quantities of freight traffic by rail and coastal shipping cargo tonnage during the past six months have been in advance of the totals during the same period last year. Except for a purely seasonal recession in February, sales-tax receipts during recent months have shown a steady monthly advance. < Banking statistics for the past few months show satisfactory features in the growth of funds held on current account and in the increasing volume of cheque transactions. That confidence in future prospects has by no means fully returned is, however, evident from the abnormally high volume of fixed deposits, the low level of advances, and the relative stagnation of mortgage and land, transfer business. The average weekly value of bank debits to individual customers’ accounts during February was £15,534,017, an increase of £3,583,790 over the figures recorded during Payment of rates and taxes normally swells the volume of bank debits during February; and, judging from the figures for preceding years, the increase between January and February of this year is mainly due to this normal seasonal fluctuation. Deposits continue to increase, the average amount of deposits during February (£62,447,445) representing an increase of £1,315,665 over the January average. That full confidence in industrial enterprise is still lacking is evident from the abnormally high level of fixed deposits, which have increased from an average of slightly under £3Q m- to 1928-29 to a figure just under £4O m. in recent months. The highest monthly average (£39,765,154) was reached in October last, since which month the figure has fluctuated very little, with a slight falling tendency. INCREASE IN FREE DEPOSITS. Deposits on current account continue to increase, the average amount so held during February (£22,009,546) representing an increase of £1,446,375 as compared with January, and of £4,018,677 as compared with February of last year. The increase in demand deposits and the stay in growth of fixed deposits are encouraging features of present banking statistics. Advances reached during February the lowest level which has been recorded during the whole period for which weekly banking statistics are available (since April, 1928). The amount of advances was on the average £41,053,258 in February as compared with £47,910,384 a year ago and £54,379,642 in February, 1831. Advances rose materially during the first stages of the depression, and it was not until the beginning of 1933 that a definite downward movement, which has since continued, set in. It is therefore reasonable to suppose that the response of this economic indicator to improved conditions will lag behind other factors. The figures for the week ended March 12 compare with those for the corresponding period last year as follow: —

Mortgage and land transfer transactions during February'show substantial, increases when compared with the very low figures recorded during January. Land transfers during February totalled 1169, the consideration being £882,320, as compared with 876 transfers in January, the amount involved in respect of which was only £506,662. There were 929 mortgages registered during February, amounting to £707,958. While this amount shows a substantial increase on the January total, and is, in fact, greater than the monthly average for the year 1933, registrations during the past year have been very much below normal.

Mar. 12, Mar. 13, 1934 1933 £ £ Bank clearings .... ,. 7,758,611 6,371,082 Free deposits ..... . 22,228,388 18,361,912 Fixed deposits ..... . 39,787,648 35,467,014 Advances ,. 39,511,684 46,924,842 Bills discounted ... 1,631,414 543,273 Ratio adv. to dep. 65.02 p.c. 85.13 p.c.