8.—16.

Business Activity. In general, production, business activity and employment were fairly well maintained throughout the year, a falling-off in some kinds of business unfavourably affected by import restrictions being offset by an expansion of local manufacturing industries. The following is a comparison of the figures for trading bank debits, net note circulation and sales tax receipts for the past three years, ended 31st March, respectively : —

External Trade. During part of the year under review, economic trends in New Zealand were affected by the war. It is useful, therefore, to divide the survey of trade and industry into two sections dealing respectively with the periods April-August and September-March. As shown in the following table, both export and import values were slightly higher, and the balance of trade lower during the first period than for the corresponding period of the previous year. During the second period there was a still greater relative increase in export values, a substantial fall in import values and a large increase in the balance of trade. This was due to a rise in export prices following the outbreak of war, and to a very considerable fall in the quantities of goods imported which more than offset the rise in prices overseas and the increased costs of sea transport and insurance.

The effect of selective import control is shown by considerable decreases in manufactured commodities such as ready-made clothing, footwear, fancy goods and motor vehicles and parts. Imports of iron and steel, electrical goods and machinery also decreased substantially. Comparatively few items, mainly foodstuffs and producers' materials, including sugar, tea, piece goods, bags and sacks, and motor spirit, showed increases. The following table sets out some of the noteworthy changes :—

Comparing the whole year ended 31st March, 1940, with that of 1939 there was an increase of £(N.Z.)I-8 millions in export values, a decrease of £(N.Z.)B-8 millions in import values and a rise of £(N.Z.)10-6 millions in the excess of exports over imports.

5

Percentage 1938. 1939. 1940. Change 1940 over 1939. (£(N.Z.) millions.) Trading bank debits (excluding Government) .. 962-4 942-9 962-1 +2 Note-circulation (weekly average held by public) 9-1 10-4 12-6 +22 Sales-tax receipts .. .. .. .. 3-519 3-572 3-521 — 1-4

Exports. Imports. Excess of Exports r over Imports. (£(N.Z.) millions.) First Period (April-August)— 1938 24,338 21,895 2,443 1939 .. .. .. .. 24,372 22,566 1,806 Second Period (September-March)— •938-39 33,529 32,513 1,016 19 39-40 .. .. .. .. 35,271 23,005 12,266 . J

Year Ended 31st March, . Percentage Change — lm - 194 °- 1940 over 1939. Quantity. Value. Quantity. Value. Quantity. Value. (000 omitted.) „ _ £(N.Z.) £(N.Z.) Motor Vehicles .. .. 31 5,204 17 2 818 -45-2 -45-9 MotorSpirit .. .. 98,977 gals. 1,796 93,577 gals. 2,030 -5-5 +13-0 Tobacco (unmanufactured) 2,8841b. 323 5,4811b. 542 +90-0 +67-8 Tobacco (manufactured) .. 1,0841b. 256 3581b. 82 —67-0 —68-0 A PP arel •• •• •• 1,348 .. 344 -74-5 Footwear .. .. 224 doz. pr. 583 105 doz. pr. 222 -53-1 -61-9 Bags and sacks .. .. .. 302 .. 597 +97-7 Cotton, linen and silk piece .. 2,397 .. 2,681 +11-8 goods Floor coverings . . . . . . 697 .. 421 +39 • 6 Iron and steel .. .. 2,523 cwt. 2,709 1,616 cwt. 2,001 —35-9 —26-1 Electrical goods .. .. .. 2,891 .. 2 343 -19-0 Su g ar 1,916 cwt. 711 1,887 cwt. '969 -1-5 - +36-3 Tea 11,3621b. 827 12,0921b. 989 +6-4 +19-6