TOTAL PRODUCTION

Dominion, Volume 34, Issue 43, 14 November 1940, Page 8

TOTAL PRODUCTION

Supply Of Consumer Goods RELATION TO PRICES

( By

Lux.)

What, was described as "a rough preliminary estimate” of factory production for 1939-10 was given to the delegates to the Economic Conference by the Minister of Finance. Mr. Nash said that the total value for the year had been sei. down at £39,500,000, the same total as for the preceding period, and he stressed the. difficulty in securing reliable data* Some time later, speaking in Parliament, the Minister stared that, there would be an increase of £3,500,000 on the figures first, announced, but lie gave no indication as to whether the increase was due to movements in values or in volume. 'The matter is of vital Importan’ce because if the increase represented only higher values then it indicated a trend toward inflation. Higher values would be applied to an unchanged quantity of goods and goods would become dearer.

The subject cropped up again during the discussion between Mr. Nash,, in his capacity us .Minister of Marketing, and the delegates to the Dairy Conference. The official report reads as follows:—

"Mr. Nash said that they had to pay for the war, and obviously could not live as well as before the war. It would be a pretty difficult job to keep production up with 50,000 men away. So far there was evidence that production had gone up both in secondary industries and primary industries. Mr. Furness: In value or in volume? Mr. Nash: In value, but the vol-

time will be published later. It will be interesting to have the full particulars. If the value of production can be assessed then obviously figures relating to volume must be available. Any failure to increase production in volume would be a serious matter for New Zealand. There was, in 1939, a most marked decline in the quantity of consumer goods imported—26 per cent, when compared with earlier years—anil this was greater in proportion than in other classes. Referring to this movement when he addressed the Economic Conference, Mr. Nash said: “If these goods could not be supplied from our own domestic production then the demand would be greater than the supply, with the inevitable results.” These results, of course, would bo rapid increases in prices and so in the cost of living, and the Minister admitted that the movement was “extremely Significant.” The figures promised by the Minister to the Dairy Conference should show to what extent, if any, these goods have been “supplied from our own domestic production.” The Prime Minister has stated that the standard of living is “the total entirely dependent on the amount of goods available.” There must be a line drawn between surpluses for export and quantities available for domestic consumption. If exports increase—and that is necessary to build up sterling balances —then there will be more purchasing power available. An increase in consumer goods and services would assist to keep prices stable, but if there should be any lag in domestic production then prices must rise.

Unfortunately there are few particulars available with regard to the volume of factory production. The latest Year Book states that some industries have undergone many changes in recent jears, “by extending their range of products and by changes in their technique of manufacturing, etc.” It adds: “Lest the insufficient data available for earlier years should tend to show an incorrect movement in the. volume of production, it has been decided, in the meantime, to discontinue the publication of index numbers of volume of factory production.” The reasons are not very convincing, and there is no apparent reason why the figures should not be given in the next issue. A comparison of the figures for 1938-39 with those of later years would be of interest and value. The latest issue of the Abstract ot' Statistics gives an analysis of the operations of some industries, but the more important are those directly concerned with Lite production of materials for the fighting forces. As might have been expected, the figures show marked movements, but, on the whole, those covering values have increased more rapidly than those dealing with quantities. It. is, however, the movements over a reasonable range of commodities that really matter, and the Minister should De asked to implement his promise with regard to figures showing quantities as soon as possible.