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War Economy

Effects of Import Selection

page 128

Effects of Import Selection

Import selection has always been associated, to a greater or lesser degree, with the quantitative restriction of imports which New Zealand has used for the primary purpose of conserving overseas exchange. Restricted imports in wartime, and the need to give priority to defence requirements, put extra emphasis on the selection aspect of import controls.

By 1941, imports were, in volume, only two-thirds of what they had been in 1937. There was some improvement in 1942, but no real recovery until 1943. For many commodities, arrivals were at their lowest ebb in 1941 and 1942.

There were remarkable changes in the types of goods arriving, induced by varying availability overseas as well as by import selection. In the usually insignificant group of ‘unclassified’ import items it was customary to include munitions and war stores. Consequently the group became anything but insignificant in time of war. Before the war, less than £1 million a year was spent on these imports but, for the year 1943, they were valued at £46 million. This was the peak year. In the following year unclassified imports were valued at nearly £30 million, but in 1945 had fallen to under £4 million.

Many civilian lines had to give way to make room for this upsurge in war requirements. Imports of materials for the building and construction industry started to fall away in 1939 and decreased steadily until, in 1942, arrivals were under half of what they had been in 1938. Imported supplies remained low for the remainder of the war period and would not again reach pre-war levels until 1947.

Imports of materials for farming also decreased after 1939 and, in 1942, reached their lowest point at a little over half of their 1939 level. Recovery here was more rapid, and pre-war levels were reached in 1945.

Manufacturing materials, in marked contrast to other producers' materials, arrived in greatly increased values for the whole of the war period. These imports had reached a peak in 1937, but were at quite high levels in 1938 and 1939. In 1940 they set a new record, being then some 25 per cent higher than any pre-war figure. There was a slight fall in 1941, followed by a significant drop in 1942 of about 10 per cent. This, however, left imports of manufacturing materials in 1942 still 14 per cent by value above the highest prewar figure. In 1943 another record was reached with imports 57 per cent above the 1937 peak. There was a further increase in 1944, and by 1946 the value of imports was twice what it had been before page 129 the war. In this fast upward movement under war conditions, manufacturers' materials were unique. Apart from munitions and war stores, the only major group coming anywhere close was producers' plant and equipment, where imports by 1946 reached 87 per cent above the immediate pre-war value.

The high degree of preference given to manufacturers' materials and equipment enabled New Zealand manufacturers to go a long way towards filling gaps in supplies of munitions, war stores, and many types of consumer goods which could not be imported in sufficient quantities because of competing allied demands for them. In some cases it also enabled New Zealand manufacturers to supply new types of goods for export to fill orders from allied countries.1

Imports of transport equipment suffered the most drastic curtailment in the war years. Civilian rather than war use was affected, a good deal of transport equipment for military and allied purposes being imported during the war as munitions and war stores. The import group, transport equipment, which stood at over £8 million for each of the years 1937 and 1938, fell to £7 million in 1939 and to under £3 million in 1940. It was to fall further to be under £2 million in each of the years 1942 and 1943, and to remain at low levels for the remainder of the war, not recovering its pre-war position until 1947.

Also seriously affected were imports of consumers' goods which, over the war period, averaged about half of their level in the immediate pre-war years. With transport equipment for civilian use, they took the main brunt of wartime import selection.

1 See also Chapter 7