WARTIME AND PEACETIME DEMAND

Wanganui Chronicle, Volume 87, Issue 39, 17 February 1943, Page 4

WARTIME AND PEACETIME DEMAND

WITH every intensification of the war effort in the belligerent countries, the harder will be the wrench which will be experienced when peace comes and war demand stops. It will then be necessary to switch to peacetime requirements with the utmost speed, for while the change-over is being effected it is improbable that the great mass of munitions workers will be fully employed. The present intensive war effort is increasing the existing- lack in consumption goods because they are not being made, and those in existence are being worn out by use. This wear is also being speeded up by the difficulty in securing spare parts and in effecting repairs. Consumer demand will, therefore, be keen immediately the war ends, and it will assert itself in the same way that it always has done. If the reorganisational period is to be negotiated speedily it becomes necessary to have reasonably close estimates of what the demand for various goods is going 1o be. Close estimates of future demand, even under the most favourable circumstances, are no more than intelligent guesses, but their use in the absence of more tangible data is to be encouraged. It is possible to make an approximation of how many refrigerators will be required, and how; many ten horse-power motor-cars, but in the final it is the consumer who actually decides which way he will spend his money. This applies particularly to what are termed consumercapital goods. Consumer-capital goods are really long-life consumer goods, and as their manufacture is usually undertaken on mass-production lines forward planning is an essential. The greatest aid to forward planning of consumer-capital goods is a good order list, for this permits of forward financing and forward buying, which in turn permit of a low price being charged for the product. When the selling cost is reduced as well as manufacturing costs, the difference is likely tn be very considerable as compared with the price which must, be fixed when the production schedule is eased on estimates of demand. It is a matter for congratulation. therefore, that the Wanganui-Rangitikci Power Board has decided upon a policy of securing forward orders to be delivered post-war. The forward order will aid employment in the factory; it will reduce the selling price of the product; it will lead to an intelligent direction of spending power as against whimspending; and, finally, it will make available to the War Savings a volume of money “for the duration.” It will also act as a conduit to spending power to the general, advantage of the wartime price position.